Skoda to make Fabia cheaper, more localised

Czech carmaker Skoda is planning to further cut the price of its entry-level hatchback Fabia, seeking to increase its sales by five times and garner 4 per cent of the market share by 2017. It will achieve this mainly through component localisation, which will also bring down the cost of ownership.

With parent company Volkswagen focussing on the premium-end, Skoda is looking to strengthen its position in the mass car segment, currently dominated by Maruti Suzuki, Hyundai and Tata Motors.

The company, which has identified service and cost of ownership as its biggest weaknesses, is also changing its organisational structure as part of a new strategy devised after a series of meetings with the company chairman at its headquarters in the Czech Republic.

Sudhir Rao, managing director, Skoda Auto India, said this is a key element of Skoda's target to grow over ''four-fold'' to 1.75 lakh unit annual sales by 2017. This is an ambitious call given that the brand sold 34,089 units in the 2011-12 fiscal and aims to sell 40,000 units in 2012 calendar.

''From 1.5 per cent, we are looking at a four per cent market share by 2015. We expect the Fabia to account for 75,000 to one lakh sales by that time. It is important for us to have a strong volume contender in the mass hatch segment,'' Rao said.

"The immediate focus is to create the right organizational set up and changing or rather improving our perception (in the marketplace) on cost of ownership," Rao told reporters in Mumbai. "An all new highly-localised Fabia will be cornerstone of that strategy."