Skoda Bets on Sedan Legacy as New Slavia Leads India Portfolio Push

Skoda Auto India is doubling down on the sedan body style even as SUVs continue to dominate the Indian passenger vehicle market, with the new Slavia positioned as a key part of the Czech automaker’s India strategy.

The company unveiled the new Slavia, alongside the return of the Octavia RS and the Superb to India, using the occasion to highlight what it calls its “sedan legacy”. The new Slavia builds on the existing platform and retains Skoda’s focus on European driving dynamics, technology, safety and practicality for Indian customers.

For Ashish Gupta, Skoda Auto India's Brand Director, the sedan is more than just another body style, it is central to the brand’s identity. "We have a history of 130 years and out of that our first sedan the Superb was born actually 90 years ago. So from Superb to Octavia and Rapid and the Slavia now, it's a long legacy and definitely sedans is not only a body style for us but also it defines our brand not only globally but also in India," he said.

Gupta added that the world has moved towards SUVs not only in India but globally as well but sedans still stay relevant. "The Slavia today has a 30% segment share, we sell close to 1500 to 1800 cars a month which is a sizable number it constitutes almost 18 to 20 percent of my portfolio sales. So for me it is an important product and since customers also associate sedans with Skoda so I think this category for us as a brand will continue to make sense," he said. 

Gupta, however, does not expect the overall sedan segment to see a significant revival in the near term. With limited competition and manufacturers increasingly prioritising faster-growing SUV segments, he expects the category to remain relatively small.

“I think there's a lack of focus also from other players because it's easier to move into high growth segments but for us it is a sizable part of our portfolio and we do think that going forward as well there will be enough customers in the sedan category as well because it's the original car," he said. 

He added that there will be a fatigue on the SUV body style and the sedan segment growth has been fueled by households which are buying the car for the first time. "Sooner or later they will move to multiple cars in the same family and when you have multiple cars in the family typically you would like to have differentiated kind of cars. So that is an opportunity which will continue to evolve in India as the market matures," he adds. 

The company also sees a potential role for sedans as Indian households graduate from owning their first car to owning multiple vehicles. Gupta believes the second-car market could create demand for differentiated body styles rather than another SUV.

“From a pure comfort point of view and from the usage point of view I do see that a lot of ladies especially prefer the sedan because it is easier to get in and get out with Indian attire," he said. The company continues to maintain a strong sedan portfolio globally, with the Superb and Octavia remaining important nameplates in its international line-up.

Octavia RS, Superb Return to India

The new Slavia launch was also used to expand Skoda’s sedan story in India. The company will bring another batch of the Octavia RS, with 50 units planned this time. The model had sold out its previous 100-unit allocation in just 20 minutes. "Many of the customers who wanted to own the car had a heartbreak. So we will also be giving an early access to those customers," he adds. 

The strategy comes against the backdrop of the India-EU Free Trade Agreement (FTA), which could materially alter the economics of importing European vehicles into the country.

"I think that's a question that every European manufacturer will ask themselves right now because of the upcoming FTA. The FTA has kind of given us a good choice between what makes better sense for us and for the market as well. The whole idea is to start deliveries towards Q2 of next year. Because we are hopeful by that time the contours of the FTA will be decided and you will have clarity on what kind of duty structure to apply on those cars," he said. 

According to Gupta, the proposed reduction in import duties could allow Skoda to bring larger batches of global models to India, although currency depreciation could offset some of the benefit. While the first year of the FTA, the duties for Skoda's class of cars goes down from 70% to 35% but at the same time we the foreign exchange depreciating by almost 20%.

"So in the last 6 months it's actually more or less offset. I don't know where the exchange rate will land up by the time the FTA is signed but on the face of it, it will offer us an opportunity to bring higher volumes of the cars, expand the portfolio from our global cars and larger volumes will be made possible by better price points," he said.