The Telegraph
Since 1st March, 1999
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Change in Skoda launch plan

New Delhi, Sept. 6: Skoda India may bring in Octavia-Classic as their third offering in the country instead of the new cars— Fabia or the costlier Lauren Klement — that were being bandied about.

The change of decision came as luxury sedan Lauren Klement is facing problems at the homologation centre while the company is facing problems in slotting the small but costly Fabia in India.

However, Skoda has fallen in its own trap in the pricing of its vehicles. The Octavia, its sole model till a few days back, was classified under SIAM’s new classification rules in the Executive segment; feature-wise it aims to match the Hyundai Sonata, which is in the Premium segment; and price-wise it competes with top mid-size cars like the Mitsubishi Lancer. Now with Fabia’s features, the car needs to be priced at around Rs 8 lakh, whereas Lancer’s base model is priced at Rs 7 lakh. Indian customers are yet to accept the fact that a smaller car can match a sedan like Lancer in elegance and luxury. Bipin Datar, head, sales and marketing of Skoda India said, “We cannot price Fabia in the Rs 8 lakh bracket as its length is much less than Mitsubishi Lancer and even Octavia. But any other way we will be losing money. We have already piled up losses by pricing Octavia low.”

He added, “With the new line, now functional, we are producing 40 vehicles a day and have crossed the 3,000 vehicles a year mark last month. The kits for the Octavia Elegance are the first that we have got without the engine and gear-box mounted on the chassis. So in reality this will be first time we will be paying duties for SKD’s instead of for CBU’s. We hope to wipe off our losses by next year as we will now be paying lower duties.”

The decision to bring in Octavia Classic — a strip down version of the present vehicle where the trim levels will be much less will benefit the company in two ways. Pricing this bigger vehicle at Rs 8 lakh would not be a problem and the production could be carried on from the same platform that Skoda has developed in India.

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