Skoda Auto VW India eyes leadership in the mid-size sedan segment with Slavia

Skoda Auto Volkswagen India, the local arm of the Volkswagen Group, is betting big on the sedan segment in India with an eye on leadership in the premium sedan segment even as every other automaker focuses on the hot-selling sport utility vehicle (SUV) market.

The company will be launching a new sedan called Slavia under the Skoda brand followed by a car from the Volkswagen brand based on the same platform as part of its Rs 8,000-crore India 2.0 plan.

With the launch of the two sedans, the company expects to get back to manufacturing at full capacity at its plant at Chakan near Pune during the next fiscal year, said Gurpratap Boparai, MD of Skoda Auto Volkswagen India. The company’s production levels had dipped of late due to a lack of new models as it prepared for the India 2.0 plan.

Following this, the company has chalked out plans for a smaller SUV, which will help it achieve its target of having a 5% combined market share for Skoda and Volkswagen brands in India.

The Skoda brand expects to achieve market leadership in this segment with sales of about 30,000 units of Slavia a year. About 72,000 cars were sold in mid-size sedan segment during FY21, led by Honda City and Maruti Suzuki Ciaz.

The new models replace the Skoda Rapid and Volkswagen Vento in India. The outgoing models sold about 8,300 and 2,300 units, respectively, in FY21.

The sedan segment has been in a slumber over the past few years with automakers focussing on SUVs. Just in FY19, the mid-size sedan segment had recorded sales of about 156,000 units. But a lack of new launches and consumer preference for SUVs meant that sales more than halved in just two years even as SUV sales continued to grow.

“The industry has forced people to look at SUV. With Slavia, we will bring more impetus back to sedans. We want to be segment leader in sedans above Rs 10 lakh,” Zac Hollis, Brand Director, Skoda Auto India told ET.

Boparai said that premium sedans offer tremendous potential for growth in the future and it is a “territory” which Skoda has “made its own” due to strong market share of its Octavia and Superb sedans.

The semiconductor crisis was the biggest supply chain challenge and the shortage has affected the company’s ability to meet market demand, just like the rest of the industry, Boparai said. He expects the shortage to ease slightly by the first quarter of next year, but normalcy was still some time away, he said.

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