Skoda plots sub-4m SUV for India with sizeable export potential

The Skoda Kushaq midsize SUV, which was introduced earlier this year as the Volkswagen Group's first vehicle under its India 2.0 plan, is soon to be followed by the Skoda Slavia sedan. Under the next phase of its plans for the India market, the Czech automaker is working on a model that could see it enter the cut-throat, compact SUV segment. “The sub-4m segment is a tough segment. It’s got to have a good margin and look good,” Thomas Schafer, chairman of the board at Skoda Auto, told Autocar India in an interview. 

Skoda's India 2.5 project  
Skoda recently took charge of developing the MQB A0 platform within the Volkswagen Group. “The MQB A0 platform is very crucial because the platform is used in India, South America, South Africa and so on, and the platform generally carries 70 percent of the value of the vehicles,” commented Schäfer. For reference, a localised version of the platform – dubbed MQB A0 IN – forms the basis of the Kushaq and Slavia, as well as their VW twins, in India.

Being in charge of the platform is set to give Skoda a lot more flexibility over developing new models, like the compact SUV. “If you are dependent on someone else for 70 percent of the vehicle, then that’s not doable. But now that we have gotten the responsibility, we can really dive into it and do it.”

However, he quickly added, “But there’s still homework to be done. It’s not an easy car. So we’re not quite finished with it yet. That’s why we call it [India] 2.5 – it is an initial idea, a working title. But we’ll see; maybe it has a [India] 3.0 and a 4.0 [in the future].”

While Skoda has indicated that it's actively studying the feasibility of a sub-4m offering, VW is yet to internally confirm a sister model and, according to Autocar India sources, the German brand may not want to enter the brutally cost competitive compact SUV space. “Just because we have taken the initiative, it doesn’t mean that Volkswagen isn’t coming onboard. This is our first step,” clarified Schäfer. “Don’t take it as a given that Volkswagen isn’t part of this journey, that is not true. But the fact remains that we need to prove that it [the compact SUV] is feasible.”

Compact SUV needs to have global appeal
The senior Skoda executive stressed that the decision to introduce a sub-4m offering would be contingent on a strong business case. “The car needs to look good. You can’t have a car only for India, to satisfy a tax opportunity. It’s got to be something that we also want to use globally,” Schafer said.

He added: “This is not the time to do a project for a project’s sake. It better be carrying the margins and financial success, otherwise it’s not the time to invest. So, [Skoda] India has to face this challenge and come up with a plan that is successful, otherwise it’s not going to happen now.” As such, ensuring a substantial potential for exports will be a make-or-break factor for the model.  

What is sure to be also weighing in on Skoda's decision is that every mass market player in India has either already jumped into the sub-4m SUV territory, or is planning to do so soon. With tough competition expected in India, the importance of a global appeal is that much more.

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