Skoda sees renewed sedan demand, GST cuts boost car sales, production lags behind recovery; long-term focus on SUVs, exports, and EV transition.
07 Nov 2025 | 2082 Views | By Prerna Lidhoo
With the Octavia RS, Skoda Auto India has reintroduced its high-performance sedan to the market. All 100 units allocated for India were booked within days of opening reservations and even as SUVs dominate India’s passenger vehicle market, Skoda India Brand Director Ashish Gupta believes sedans are poised for a strong ...
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With the Octavia RS, Skoda Auto India has reintroduced its high-performance sedan to the market. All 100 units allocated for India were booked within days of opening reservations and even as SUVs dominate India’s passenger vehicle market, Skoda India Brand Director Ashish Gupta believes sedans are poised for a strong comeback, driven by design, driving dynamics, and the brand’s loyal enthusiast base. Gupta told Autocar Professional that the company's upcoming product roadmap continues to keep sedans in focus while also expanding its SUV portfolio. “The Octavia RS has always represented the best of Skoda’s engineering and driving experience. The kind of response we’ve received for the RS proves that the love for sedans is far from over. Globally and in India as well, I think SUVs will continue to be the biggest choice for customers in terms of body style,” he said. “But sedans are the quintessential car. If today you ask a child the definition of a car, he will most probably draw a sedan. The love for sedans will not go away.” He adds that for sedans to regain lost ground, manufacturers need to start “re-believing” in the segment. “I do believe that sedans have a potential to make a strong comeback, but it will need the OEMs also to continue to invest in it. More variety and more options for customers are always good, that’s basic for expanding any segment,” he said.
Demand revival
The recent changes in GST rates have brought a rare development in the car industry. “I am 50 years old now and I have never heard car prices going down,” he said. “This is the first time you actually see substantial changes in car price, a drop of almost 10 percent in the smaller car segment is unheard of.”
He said the timing was fortuitous, coming after a relatively soft second quarter for the industry. “These changes came at the right moment. Quarter two was showing downward trends for the automobile industry.” However, production recalibration remains a challenge. “Demand has picked up, but it’s difficult to make production changes so quickly. You typically plan 12 to 16 weeks ahead,” Gupta explained. “We are in discussions on what can be brought forward to meet the demand, but I do see there will be shortages in the market.”
Skoda India’s market share has doubled year-on-year to around 2% and Gupta said the company is on track to sustain its No. 7 ranking. “We will maintain this for the rest of the year,” he adds.
Skoda’s long-term strategy
Even with short-term market volatility, Gupta reiterated that Skoda’s strategy remains long-term. “Strategy is never for six months or one year. Strategy is five to ten years,” he said. “Within that strategy, your tactics might change from year to year like which segments to focus on, which powertrains make more sense. That is the recalibration we are working on.”
Skoda’s current portfolio, he noted, already covers 60–65% of the Indian market — from the A00 SUV segment (Kylak) to the Kushaq, Slavia, and Kodiaq. “Our effort will be to make maximum use of the portfolio we have, bring frequent refreshes. The Slavia and the Kushaq refreshes are what we are working on, and we are also looking at the bigger segments like the Kodiaq segment,” he adds.
However, he emphasised that despite the need for faster product cycles, the company’s portfolio remains relatively fresh. “The Kylak is only six months old, and the Kodiaq is five months old. So, we have a new enough portfolio. Future product portfolios are under discussion, but it’s too early to talk about them.”
The compact SUV Kylak has emerged as a blockbuster, contributing around 60% of Skoda India’s total sales. Gupta, however, does not view this as over-dependence. “If you look at the dynamics of the Indian market, 30 percent of the market is the smallest SUV segment, where we are present with the Kylak. So, in everybody’s portfolio, this one hero product exists. This segment will continue to be the biggest part of any portfolio,” he said.
Localising while exporting globally
Exports form a crucial part of Skoda India’s business, contributing around 40% of total production. “We are one of the largest exporters from India. Our biggest markets are in Latin America and South Africa. Mexico is one of our biggest customers. We have been successful in making India a base for exports, and that will continue,” he said.
Localization, he added, remains vital for competitiveness in both domestic and export markets.
“Without localization and achieving the local cost base, no OEM can expand. But with global geopolitical shifts, you have to balance between local production and opening up globally. We are big proponents of open trade; tariffs are never good,” he said.
Free trade discussions with Europe, he said, could further benefit Skoda as a European manufacturer. “It would allow us to bring our global products into India at better price points and give Indian customers access to a wider portfolio,” he added.
EVs remain the long-term future
While the industry is debating the role of hybrids amid slowing global EV growth, Gupta remains clear-eyed about the long-term direction. “The future will continue to be electric because that is a more sustainable powertrain but in the interim, during the transition, everyone will have to look at various options like gasoline, CNG and hybrids,” he said.
He acknowledged that regulatory frameworks would determine the pace of powertrain transitions. “At this point, GST changes have not given anything extra to EVs, but they continue to be taxed at 5%, which is a strong incentive. There’s nothing additional for hybrids,” he said.
While he admitted hybrids have grown without incentives, Gupta cautioned against expecting subsidies across all technologies. “Demanding subsidy on every kind of powertrain is not right. Beyond a point, it comes down to what the customers prefer. Incentivization helps in the short term, but the true test of a technology is when it stands without incentives,” he said.