Betting big on mini-SUV

How do you see the launch of Kylaq bringing about a significant increase in the addressable market segment for Skoda Auto?

Currently, our addressable market segment is 27-28 per cent because we are selling cars in segment A, besides luxury B and C segments. We have addressed roughly 30 per cent of the market size. Nearly 60 per cent of the market is sitting in the sub-4m category. Out of this, 50 per cent lies with the SUV segment. We are hoping that with Kylaq, our addressable market size will become 60 per cent by next year when the car comes on the road. The bookings for Kylaq will start from December 2, while the delivery will begin in January 2025.

In the compact SUV segment, the focus of the buyer is on practicality and budget. How do you plan to convince people to buy your product?

The total cost of ownership is very competitive. Since we have 90 per cent localisation, the price of the spare parts, too, has come down. Our proposition for Kylaq would be competitive for the total cost of ownership — be it servicing or spare parts, it would be in keeping with the market benchmarks.

Customers have high expectations from Skoda, which is a European brand. The customer looks at improvement in product through communication and advertisement.

Are you contemplating exporting Kylaq?

All the vehicles are being made keeping in mind the Indian market as well as for export purposes. The same is true for Kylaq. But since we are in the phase of introduction and ramping up, and there is a substantially big market segment in India, we would first cater to the Indian market, and then evaluate any export opportunity.

Which are the possible countries?

We are already exporting our products to 40 countries. We are looking at expanding our portfolio in the Middle East and Far East. Vietnam is one market where we will have our products in the next year. These products are being developed in India. These will be supplied as components and as CKD (completely knocked down) parts to a partner in Vietnam, where these will be produced next year.

There is a lot of talk going on about hybrid, electric as well as flex fuels. What is your strategy for the Indian market?

Technologically, we are prepared for all fuel options. We have hybrid, EV, flex fuel and very efficient internal combustion engine (ICE) technology. Our models such as Kushaq, Slavia, Virtus and Taigun are the first cars certified for E20 fuel for the homologation, a target set for 2025 which we have been able to achieve much earlier. In future, too, depending on the availability of infrastructure for flex fuel or EV charging, we will introduce the product. Technology-wise, we are ready, and we will bring the right technology as per the customers’ preference and affordability. At the end of the day, it is the customer who decides what to buy.

We fully understand the government’s intention of bringing down the CO2 emissions. On the one hand, our vehicles are fuel efficient while at the same time, we have achieved E20 certification ahead of the competition. We are waitng for an opportune time to bring in electric vehicles, global products as well as Indian products into the market. Once the infrastructure develops and there is demand for it, we will bring that technology.

Is there a timeline?

We are evaluating all options, so I won’t be able to give a timeline. Before the turn of the decade, we are targeting to have global products as well as local products in the Indian market.

You are expecting to sell 1 lakh units by 2026. Do you have enough capacity to meet the demand?

We have enough capacity to meet the requirements of our sales target.

How much are you planning to invest in India operations over the next two years?

Investment in India is product-driven. We will invest in the product once we have a product portfolio and product strategies have been decided. That will define our future investment.

Do you have plans to set up a battery pack assembling plant in India?

We have a battery pack assembly unit in Mlada Boleslav, nearly 60 km from Prague in the Czech Republic, where Skoda’s biggest factory is located. Once we decide the product configuration, we will evaluate whether we should do the battery pack assembly in India or there, depending on the opportunities to do it with partners.

About Kylaq

• A sub-4 metre SUV, it has been designed in India.
• The name is derived from the Sanskrit term for a crystal and is named after Mount Kailash. The larger Kushaq in Skoda Auto India’s SUV line-up also gets its name from the Sanskrit word for an emperor.
• The starting price of Rs 7.89 lakh (ex-showroom) is the most competitive Skoda has ever been in India. Kylaq will compete with models such as Brezza (Maruti Suzuki), Nexon (Tata Motors), Venue (Hyundai), Sonet (Kia Motors) and XUV3XO (Mahindra & Mahindra).

Skoda Auto India

• Models in India — Slavia, Kushaq, Kodiaq, Kylaq and Superb.
• It has presence in more than 150 cities across the country, with over 260 customer touchpoints.
• Skoda Auto had its biggest year in terms of sales in India in 2022. It has recorded 1 lakh sales over the past two years. This is the shortest time a company has taken to achieve this milestone in the country.