Can Kylaq script a turnaround for Skoda?
With a starting price of Rs 7.89 crore the company is hoping its new model will help it make a splash in the sub-4 metre compact SUV segment, which accounts for 30% of overall SUV sales
- Nov 14, 2024,
- Updated Nov 14, 2024 6:32 PM IST
For a brand that has been present in India for nearly 24 years, Czech automaker Škoda has had a bumpy ride in the domestic automobile market. Škoda, which currently accounts for 1% market share in the world’s third-largest automobile market, has introduced its new offering, Kylaq, a sub-4 metre compact SUV (sports utility vehicle), at the starting price of Rs 7.89 crore.
The company, which has Slavia, Kodiaq, and Kushaq in India, is planning to grow volumes through the new product. The sub-4 metre compact SUV segment accounts for 30% of the overall SUV segment.
“We want the volumes now with Kylaq, so that’s why the pricing. That’s why Škoda is passionate about the product and trying to push it forward,” Petr Janeba, Brand Director, Škoda India, tells Business Today. The company plans to have an overall 100,000 units in sales by 2026. In FY24, the company sold 24,000 cars in India. “Our current product portfolio can cover only 27% of potential new car buyers in India. We had to take this call one day about whether we would be a volume brand in India and grow in scale or not,” he adds. Škoda plans to cover 60% of potential new car buyers in India with Kylaq.
According to Janeba, the sub-4 metre compact SUV segment is among the fastest-growing in India. Despite heightened competition, the entry of Kylaq will enable the segment to grow. “Every new competitor who is coming now, including us with the Kylaq, will increase the segment because the attraction of the segment will grow. So it is not only the biggest segment in the sub-4 metre segment; the SUV is also the fastest-growing segment,” observes Janeba.
Janeba acknowledges that Škoda is entering the fierce sub-4 metre SUV segment a bit late as compared to its peers. “Coming a little later, we are coming to fiercer competition, but we can learn all the mistakes that the other brands were making before, and we can know all the customer expectations. So we decided to come now,” notes Janeba. In order to expand its footprint, the company is planning to open 90 service points in the next eight months. It currently has 260 service points and aims to have 350 touchpoints in the next eight months.
“Every potential customer in India should have his dealership closer now, so the proximity will decrease between the next score showroom and a potential customer,” says Janeba.
One of the obstacles, according to Janeba, that the company has often faced is people’s perception of the cost of owners. That’s why the company has increased the localisation of Kylaq to 76%.
Notably, the company also plans to export Kylaq to international markets such as Mexico, South Africa, and West Asia. According to analysts, the pricing of Kylaq is likely to attract customers in the sub-4 metre SUV segment. “Once Škoda has a complete range of products in the compact SUV segment or sub-compact SUV segment, then customers will have more reason to come to the company’s showroom. I think that is the first advantage that Skoda will get,” observes Puneet Gupta, Director-S&P Global Mobility, adding that the sub-4 metre compact SUV segment is among the fastest growing and Kylaq will have some market share in the segment.
“Giving more price points to the customers obviously will help in more sales. And overall it is good, and that will also boost the confidence of their global management that the Indian market will do well if you keep on introducing products. So I think continuous new product launches are very important for any company that comes in the mass market segment,” Gupta adds.
For a brand that has been present in India for nearly 24 years, Czech automaker Škoda has had a bumpy ride in the domestic automobile market. Škoda, which currently accounts for 1% market share in the world’s third-largest automobile market, has introduced its new offering, Kylaq, a sub-4 metre compact SUV (sports utility vehicle), at the starting price of Rs 7.89 crore.
The company, which has Slavia, Kodiaq, and Kushaq in India, is planning to grow volumes through the new product. The sub-4 metre compact SUV segment accounts for 30% of the overall SUV segment.
“We want the volumes now with Kylaq, so that’s why the pricing. That’s why Škoda is passionate about the product and trying to push it forward,” Petr Janeba, Brand Director, Škoda India, tells Business Today. The company plans to have an overall 100,000 units in sales by 2026. In FY24, the company sold 24,000 cars in India. “Our current product portfolio can cover only 27% of potential new car buyers in India. We had to take this call one day about whether we would be a volume brand in India and grow in scale or not,” he adds. Škoda plans to cover 60% of potential new car buyers in India with Kylaq.
According to Janeba, the sub-4 metre compact SUV segment is among the fastest-growing in India. Despite heightened competition, the entry of Kylaq will enable the segment to grow. “Every new competitor who is coming now, including us with the Kylaq, will increase the segment because the attraction of the segment will grow. So it is not only the biggest segment in the sub-4 metre segment; the SUV is also the fastest-growing segment,” observes Janeba.
Janeba acknowledges that Škoda is entering the fierce sub-4 metre SUV segment a bit late as compared to its peers. “Coming a little later, we are coming to fiercer competition, but we can learn all the mistakes that the other brands were making before, and we can know all the customer expectations. So we decided to come now,” notes Janeba. In order to expand its footprint, the company is planning to open 90 service points in the next eight months. It currently has 260 service points and aims to have 350 touchpoints in the next eight months.
“Every potential customer in India should have his dealership closer now, so the proximity will decrease between the next score showroom and a potential customer,” says Janeba.
One of the obstacles, according to Janeba, that the company has often faced is people’s perception of the cost of owners. That’s why the company has increased the localisation of Kylaq to 76%.
Notably, the company also plans to export Kylaq to international markets such as Mexico, South Africa, and West Asia. According to analysts, the pricing of Kylaq is likely to attract customers in the sub-4 metre SUV segment. “Once Škoda has a complete range of products in the compact SUV segment or sub-compact SUV segment, then customers will have more reason to come to the company’s showroom. I think that is the first advantage that Skoda will get,” observes Puneet Gupta, Director-S&P Global Mobility, adding that the sub-4 metre compact SUV segment is among the fastest growing and Kylaq will have some market share in the segment.
“Giving more price points to the customers obviously will help in more sales. And overall it is good, and that will also boost the confidence of their global management that the Indian market will do well if you keep on introducing products. So I think continuous new product launches are very important for any company that comes in the mass market segment,” Gupta adds.