Skoda Motors India Comeback Backed By VW's 1 Billion Euro Investment

  • 9th, Mar 2018 4:37 PM
  • SAGMart Team
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Skoda Auto, the Czech Subsidiary, of the Volkswagen Group is touted to receive an estimated €1 billion investment. The investment is primarily aimed at reviving the automakers Indian Operations. Skoda Auto will now shoulder and lead product development for India and other emerging markets for the VW Group. The same will be confirmed by the VW Group at sometimes later this month. This would put Skoda Auto in command of India Operations.

The VW’s Chakan Plant is the first in line which Skoda is supposed to take over. The Chakan Plant will be Skoda's new production base. This location would be automakers knowledge center and may be the epicenter for churning out the future high-volume models, it plans to develop. However, Skoda will have to clear certain initial taxation and legal laws may prove likely hurdles in the transfer process.

As far as the investment goes, a major portion of it would go into retooling the Chakan Plant. This would include setting up a new production line based on the new MQB Platform. MQB is now the standard global architecture for all small and midsize VW Group cars. Further, manufacturing plants for MPI and TSI derivatives of the EA211 petrol engine family are also part of the fresh investment.

Skoda Fabia

The construction phase for the MQB production line in no way will hinder the production of the current generation of Skoda Rapid, Volkswagen Vento, Ameo and Polo underpinned by the older PQ25 platform. The construction of the MQB Production line will run in parallel with the parallel with the current functioning production line based on the older platform. However, the current PQ25 platform will be gradually replaced completely by the MQB platform. By 2020, Skoda plans to have a fresh model line-up built only on the MQB Platform. This would include a midsize SUV, followed by a sedan and a hatchback for each of the respective brands.

Speaking to the press at the Geneva Motor Show, 2018, Oliver Stefani, Head of Design Skoda,
Cleared that the first offering from the Skoda-VW partnership could be a midsize SUV. The compact SUV would be smaller than the Kodiaq and Karoq. The SUV will borrow its look from the recently unveiled Vision X at the Geneva Motor Show 2018. But it will still have a comparatively larger rear space to cater to the needs of the Indian Families. On the road, the compact SUV will in all likelihood lock horns with the likes of Hyundai Creta.

Skoda Vision X Concept

Keeping in mind the budget conscious and economy driven Indian Consumer Auto Market, the two automakers will share some body panels to reduce cost. The move is also aimed at reducing production cost. The new offering for the Indian Consumer will mimic the signature VW T-Cross Design. VW, however, confirmed that the move will not be a hindrance in granting the fresh appeal and look to the future product line.

It now appears that SKODA and VW will no longer just introduce ‘badge-engineered’ products like the Skoda Rapid and VW Vento to its Indian Audience. The Indian Consumer is now of utmost importance to both VW and Skoda. Indian car lovers can now get products that stand out for themselves in design and driving experience.

The road ahead for Skoda-VW will mean achieving following objectives:

1. Expanding and upgrading the dealer network for higher sales
2. New Models must embody and reflect design tastes of the Indian Crowd.
3. Focusing on deep localization to drive costs down
4. A new range of Petrol Engines

Apart from the mid-size SUV, the next line of offering from the SKODA-VW partnership includes the next-generation Vento and Rapid. The upcoming products will go through strong cosmetic updates and new models will replicate local tastes and design preferences. The VW and Skoda hatchbacks are last in the line of offerings. These products demand large-scale production and clever pricing for them to be the mass favorite and profitable.

Volkswagen Polo

VW Polo will go through the knife. The length of the latest generation of polo will be reduced by
Four meters for India. The snip has been aimed to make use of the ‘small car’ tax advantage and eventually lure price conscious but likely customers. The VW hatchback will be the latest generation European Polo and encompass all modern-day standard global features.
As far as the Skoda is concerned, the Fabia, whose production was scrapped in 2014, could make a re-entry into the already crowded market. which was discontinued.

New Petrol Engines

The next-gen Polo and Skoda hatch will be powered by a new 1-liter naturally aspirated (MPI), three-cylinder motor generating a modest 65hp.
A fuel-efficient three-cylinder 1.0 TSI or turbo-petrol churning 115hp will power the future Vento
The old serving 1.6 MPI petrol (EA111) in the Rapid will be replaced by the 1.0 TSI

Volkswagen T-Cross

As far as the diesel engine is concerned Skoda has a lot of tough questions to answer. Skoda’s decision to not develop an upgrade of the 1.5-litre EA189 diesel motor is an indication of the carmakers intent to discontinue the engine following the new emission norms set to be applied after April 2020. Skoda will need a BS-VI standard diesel engine for the entire VW group. The present 2.0-litre, four-cylinder EA288, is a good alternative for midsize SUV. however it will not fit in for the power requirement of the midsize sedans and hatchbacks
after 2020 will be the 2.0-litre, four-cylinder EA288, which will be a good option for the midsize SUV but not for them, which need a small-capacity diesel motor. With the presence in only petrol segment, Skoda may push for an increase in sales volume by concentrating equally on the export market.

These few months will bring back old memories for the Czech carmaker which during its infant years in India was the lead brand for the VW Group. Nearly 20 years later it still finds itself on the same side of the coin. However, this time it would be more than willing to tap into the growing Indian middle class as well tune in their needs and tastes.