‘India key to Skoda’s internationalisation plans’: CEO Klaus Zellmer

A sub-compact SUV and electrification are an important part of Skoda’s expansion plans, the carmaker said.

Published On Mar 17, 2023 11:05:00 AM

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Klaus Zellmer, the CEO of Skoda Auto, has said India is the 'lynchpin' of the brand’s internationalisation strategy and that it has become an important market for future growth with locally developed models, including electrification. Skoda Auto’s top executives believe electrification is gathering pace in India, with Zellmer adding, “Skoda wants to be part of its growth potential and the company is already exploring different scenarios.”

Addressing the media in the post-annual earnings call, the top management said India is an important market and the European carmaker is planning to enter the sub-compact SUV space in the coming years, including electric vehicles.

As part of its ‘Next Level Strategy 2030’ announced last year, going big on “international, electric, digital” are the key pillars of future growth and India is set to play a critical role in all these areas. “India is one of our top three markets; the recent development has been a fantastic story for us,” Zellmer said. “We have outperformed the market; we are gaining market share and we delivered over 51,900 cars posting a growth of over 128 percent.”

On localisation of electric vehicles and whether it can gain from the group's conversation with Mahindra & Mahindra, Zellmer told our sister publication Autocar Professional, “India is expected to have battery electric vehicle penetration of 20-25 percent by 2030. We want to be part of that growth potential, with our competence and scaling possibilities with our platforms. As we speak, we are looking into different scenarios on how to lift that potential in the Indian market.”

India key hub to ASEAN, Middle East markets for Skoda Auto

India will be a key base to build Skoda's presence in the ASEAN and Middle Eastern markets, the company has announced. To that end, Skoda has already entered into a partnership in Vietnam, which will be served from India in the form of completely knocked-down parts in 2024.

The Czech carmaker said the Vietnamese market has the potential to add about 30,000 to 40,000 cars to the company's global sales in the coming years. And it would look to add more markets in the region in the coming years.

Martin Jahn, board member for Sales and Marketing at Skoda Auto, said, “The biggest challenge and open space for Skoda is ASEAN, where we are taking the strategic lead for the brand group volume and we will be looking at countries in ASEAN. The Middle East is definitely a good export potential from India – so these are two main regions we will be focusing on in the future.”

Reviewing the calendar year 2022, MD and CEO Of Skoda Auto Volkswagen Piyush Arora said India is fast becoming a “force to reckon with” within the automotive world and the group is marching on its way to seeing sustained growth towards achieving five percent market share by 2025. “Skoda reflected a strong performance and grew by more than 125 percent. In fact, last year, we saw double-digit sales growth for all other group brands in India as well,” said Arora.

On the future of EVs and new Skoda models

On adding future models, the global management said there are multiple projects being explored. “The new segment we are looking at is the sub-compact SUV. We will look at every product produced in India not only for the domestic market but also for exports. In the future, we will be looking at battery electric vehicles,” Jahn said.

The company was silent on the timelines for the sub-compact SUV, but Autocar Professional reports that the sub-four-metre SUV is slated for launch in 2025. Till then the company will continue to rely on the Kushaq and Slavia to help the brand build its momentum in the country.

Arora said the EV transformation is taking place faster than foreseen in India. “Analysts suggest that by 2030, about 15-25 percent of the market will be battery-powered, but at the same time the ICE market will continue to be strong. We believe our growth path in India will have to include both ICE and BEV models,” he added.

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India to be a strategic export base for Skoda: MD Piyush Arora