ŠKODA’s Indian boost

ŠKODA’s Indian boost

ŠKODA WORLD

India is one of the most important markets for ŠKODA. What’s the story that led to the brand’s current success and how is it doing at the moment?

10. 11. 2022

The journey had a great start with the KUSHAQ and the SLAVIA models. ŠKODA has been reporting record monthly and quarterly sales consistently in India, being responsible for a global platform – the MQB A0 – after having specially adapted the MQB-A0-IN platform for the KUSHAQ and the SLAVIA in India. Another strong testament to the brand’s success in India. But let’s take a look at where this story began.

The keyword is INDIA 2.0. With this project, the Volkswagen Group launched the next big move in India. In mid-2018, the Group announced that ŠKODA would lead the Group’s five brands in the region and will develop a sustainable model campaign for the ŠKODA and Volkswagen brands in India. The Group also announced an investment of €1 billion to implement this programme.

23_SKODA_KUSHAQ_WP_85b16b30The ŠKODA KUSHAQ was the first INDIA 2.0 project.

Third foundation anniversary

There was one very important milestone in the INDIA 2.0 journey: the merger of the three Indian passenger subsidiaries of the Volkswagen Group – Volkswagen India Private, Volkswagen Group Sales India Private and ŠKODA AUTO India Private into one entity named ŠKODA AUTO Volkswagen India Private in 2019. The merger of the three companies was orchestrated to make use of synergies, combine the technical and managerial expertise of the three companies, enable faster and coordinated decision making and unlock Volkswagen Group's potential in the highly competitive Indian market.

Two brand new models were designed using the versatile MQB platform, reaching as much as 95 per cent of localisation. In January 2019, a new Technology Centre was opened at Chakan, Pune, where engineers develop vehicles tailored to meet the needs of customers in the Indian subcontinent, including project management, electronics, infotainment, body design, interior or chassis. Production of locally-made SUVs and sedans started in 2020.

Otevření Technologického centra Škoda Auto a VWThe Technology Centre in Pune, opened in January 2019

Witnessing the best year

The Group’s mission under the INDIA 2.0 project is fully in line with the vision of “Atmanirbhar Bharat” which translates as “self-reliant India” or “self-sufficient India”, a term coined by the Government of India to refer to the economic development in the country.

“We have worked closely with Indian suppliers to meet the Group’s standards, best practices and global technology. It is a matter of great pride that many of these have also become suppliers to the Volkswagen Group globally. The Group’s endeavour to engineer and produce cars in India that will be driven by the world has also created a strong base of developers and engineers working from India. Through the INDIA 2.0 project, we also encouraged global suppliers to set up operations in India, source and train local manpower in line with the nation’s ‘Skill India’ initiative. The pandemic further accelerated the need for more local and efficient supply chains,” says Piyush Arora, Managing Director and CEO at ŠKODA AUTO Volkswagen India.

Piyush Arora Piyush Arora
Managing Director and CEO at ŠKODA AUTO Volkswagen India

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The group’s five brands offer more than 30 models to its customers via over 400 sales points with a target to reach 500 by the end of 2022. The ŠKODA brand’s dealer network is also rapidly expanding and is present in more than 125 cities. From 100 sales outlets in 2020, the number of outlets will have increased to more than 200 by the end of 2022, doubling the number of places where people can buy a ŠKODA in two years.

The widespread acceptability and popularity of the ŠKODA SLAVIA and Volkswagen Virtus sedans, and the ŠKODA KUSHAQ and Volkswagen Taigun SUVs, reflect in sales numbers and also validate the success of the INDIA 2.0 project. Powered by the five brands, the Group clocked its highest-ever sales in India, with over 75,000 units sold from January to September 2022, with an impressive growth of 120 per cent year-on-year. Individually, ŠKODA brand sales figures for this year (from January to September) crossed what the brand achieved in all of last year. The brand has sold more than 41,000 cars in the first nine months of 2022, its highest number ever in India and a growth of 167 per cent. India has now become one of the top three markets for ŠKODA AUTO globally.

210607-SKODA-KUSHAQ-SOP-2_0a336c7aProduction of the KUSHAQ in India for the local market began in 2021.

A two-model offensive

It was the ŠKODA KUSHAQ model that marked the beginning of a new era for the brand in India. The SUV was the first production vehicle of the INDIA 2.0 project – and the first ŠKODA to be developed and manufactured in India and for India, and for the world. The name comes from the millennia-old Indian language Sanskrit, in which “Kushak” means king or ruler. It is currently the best-selling ŠKODA in India. The carmaker has recently started exporting the KUSHAQ to the AGCC markets (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE) – the first made-in-India ŠKODA to be exported.

Škoda KodiaqŠKODA’s first big success in India was the ŠKODA KODIAQ SUV.

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Over 50 per cent of sales come from the KUSHAQ. About 40 per cent from the SLAVIA. The rest is made up of the KODIAQ, OCTAVIA and SUPERB. With the SLAVIA, the plan was to double sales year-on-year in 2022 – the brand has already achieved more than that.

“The second ŠKODA developed to meet the specific requirements of Indian customers was the SLAVIA. The traditional sedan received a dynamic design and a range of modern solutions. The best way to describe the new SLAVIA is connecting worlds. The car with a traditional sedan body – with a stepped rear and a flip-up boot lid – is a response to the unceasing demand from Indian customers in this segment. At the same time, though, the SLAVIA has been endowed with a modern and dynamic design featuring crystalline elements that make it a typical ŠKODA for the 21st century. The SLAVIA has gained rapid popularity in its segment and is contributing significantly to the growth of the brand.  The Group is also gearing up to introduce the KUSHAQ and SLAVIA in Vietnam, which is an important milestone for the team in India,” Arora describes.

08_skoda_slavia_b20a2ec7 The SLAVIA quickly became popular in its segment and is driving the brand’s growth.

But, as the brand is gaining popularity, all models are doing well within their segments. The OCTAVIA has hit the record of being one of India's best-selling locally-assembled cars. Moreover, it now holds the distinction of being among the top longest-running nameplates in continuous sale currently in India. The SUPERB sedan and the KODIAQ SUV also attract new luxury car buyers to the brand and have made a mark for themselves in their respective segments.

‘All our locally assembled cars, like the OCTAVIA and SUPERB, complement our product portfolio which is dominated by the INDIA 2.0 cars and help us maintain value-luxury-class positioning in the country. The OCTAVIA has the first-mover’s advantage amongst the locally-assembled models from ŠKODA with massive fan popularity. In fact, enthusiasts associate the ŠKODA brand with the OCTAVIA. Along with the SUPERB and KODIAQ, it helps us maintain our premium image and clientele. This is what makes these models as important for us as the INDIA 2.0 range,’ the Indian CEO concludes.

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The Volkswagen Group hit its record-breaking sales in India in the first six months of 2022 with 52,698 units sold (compared to 18,008 units in the first half of 2021. The Group’s yearly sales in 2021 were 54,598 units). The production volumes grew by 100 per cent year-on-year from January to June of 2022 – 73,606 as compared to 38,111 units in the first half of 2021. ŠKODA AUTO sales figures for the first half of 2022 (28,876 units) exceeded the sales of all of 2021 (23,858 units).

A MONTE CARLO version of the ŠKODA KUSHAQ was produced for the Indian market.

Which features do Indian customers like the most and do they have country-specific requirements? What are the brand’s plans in India in terms of sustainability and carbon neutrality? Will electric cars be introduced in the area anytime soon? We’ll bring answers to these and other questions in an interview with ŠKODA India’s CEO Piyush Arora soon.

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India has had a new hero since mid-October – ŠKODA’s KUSHAQ SUV. It scored full five stars out of five at the Global New Car Assessment Programme (GNCAP) crash tests, which makes it the safest car in its segment and furthers the cause of  “Safer cars for India”. It’s built on a platform specifically developed for India with a great focus on localisation, lower costs of ownership and maintenance, while retaining dynamic driving traits and zero compromises on safety. The platform was tested internally for a variety of impacts and its structure consists of high-tensile steel ensuring a rigid and impact-absorbing body structure to complement the bevy of active and passive safety technologies. The KUSHAQs scored 30 out of a maximum of 34 points for adult occupants. In the case of child occupants, the SUV scored 42 out of a maximum possible of 49 points making it the first-ever car to receive a 5-star rating for child occupants.