Czech auto major and Volkswagen subsidiary, Skoda, has firmed up plans to launch the Octavia - its mid-size car offering by June 2000.
According to news reports, the Octavia will assemble semi-knocked down (SKD) kits at the greenfield plant which it plans to set up near Aurangabad (Maharashtra).
Skoda has set itself a target of 3,000 cars in the first year of operations. It expects to touch 10,000 cars by the third year. As the company will be starting small, its dealer network will be proportionate. Sources revealed that the Fabia (a new model) will follow the Octavia in 2001.
Volkswagen's foray in the Indian market (through the Skoda) heralds the arrival of other companies (like Audi) from its stable. These companies will try to leverage the Volkswagen group strengths to establish a foothold in the Indian markets.
Skoda's arrival will make the mid-sized car segment extremely competitive. A lot of companies (General Motors, Honda, Toyota, Maruti, TELCO) are eyeing this segment with interest and have launched or plan to launch models in the near future. Companies with the broadest range of models catering to a vast segment of consumers will be most successful. Currently, only Maruti fits the bill. Manufacturers like Ford, General Motors and now Skoda will find it difficult to survive with just a couple of models.
Given the kind of competition it is dealing with (Maruti, Ford, General Motors, Honda, Mitsubishi) Skoda will find the going far from easy. With just one model and a small-scale distribution network, it will find it a struggle, at least initially. However, as no indicative price for the Octavia has been announced as yet, it is difficult to comment on the success of the car as far as pricing is concerned.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407