Skoda targets aggressive pricing for upcoming compact SUV

Heavy localisation, taxation benefits will help Skoda achieve competitive pricing, says Piyush Arora, MD and CEO, Skoda Auto VW India.

Published On Feb 02, 2024 04:40:00 PM

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Skoda targets aggressive pricing for upcoming compact SUV

Skoda SUV image used for representation.

Piyush Arora, MD and CEO, Skoda Auto VW India.

Skoda seems to have its work cut out for its upcoming compact SUV that will go on sale sometime next year. This compact SUV will be an all-new product for Skoda, and will be made in India for domestic and export markets.

Skoda targeting 90 percent localisation for compact SUV
To get 1.0 TSI engine; 1.5 TSI unlikely but under consideration
Will be exported to Mexico, Africa and other countries

Skoda compact SUV: price, localisation targets

The new compact SUV from Skoda will enter a segment that already has a long list of players with well-established products like the Maruti Brezza, the Hyundai Venue and the Kia Sonet. With the new compact SUV, Skoda will leverage the huge amount of localisation and the tax benefits available for sub-four-metre vehicles in order to achieve competitive pricing.

“Localisation is one of the major initiatives we had taken for this product and I’m sure we will be able to meet the market expectation with the pricing which will come out then,” said Piyush Arora, MD and CEO, Skoda Auto Volkswagen India in a video interaction with our sister publication, Whatcar? India. He added, “For India 2.0, we had already said we have achieved almost 90 percent localisation and that is the number we want to do for India 2.5 as well.”

As we reported earlier, this new compact SUV will be the first product for Skoda under the new India 2.5 plan. Sources tell us that this SUV is expected to start production by January 2025 in India. In order to achieve higher economies of scale, this compact SUV will piggyback on the already heavily localised supplier base for the MQB AO IN-based Skoda and VW cars that are currently on sale in India. One can expect more part and component sharing from the larger models like the Kushaq as well. These could include seats, suspension and electrical components, infotainment and instrumentation devices, among others.

Skoda compact SUV: powertrain options

As far as its powertrain goes, Arora says that the heavily localised Indian engines – the 1.0 TSI and the 1.5 TSI turbo-petrol units – will see duty on India 2.5 models. However, the business case for the larger 150hp engine is still being evaluated for application in the compact SUV. Arora explained, “In the India 2.0 segment, we have seen that there is a good demand for the 1.5-litre (turbo-petrol engine). But for the sub-four-metre compact segment, we’ll have to see if this really works or not.”

Considering its sub-4m length, this means only Skoda’s compact SUV with the 1.0-litre TSI engine will get tax benefits. Similar to what we’ve seen with Maruti Suzuki’s Jimny and Brezza, which come with 1.5-litre petrol engines, if there’s a 1.5-litre TSI engine-equipped model, it will not be eligible for any benefits.

Skoda compact SUV: export potential

The made-in-India Skoda compact SUV will be a global model, as besides taking charge of the group's India operations, Skoda Auto also took over further development of the MQB A0's global development. This new SUV will be exported to markets like Mexico and Africa, and even to some South-East Asian markets like Vietnam.