Skoda Plans CNG Push, Larger SUV under Study as it Charts its Next India Chapter

Skoda Auto India is aggressively evaluating CNG powertrains for its India portfolio as it looks to tap the growing demand for alternative fuels, while also identifying a larger SUV as one of the key gaps in its future product line-up, according to Ashish Gupta, Brand Director, Skoda Auto India. Gupta said CNG has emerged as a priority for the company, particularly as demand for the fuel expands beyond its traditional utility-focused customer base.

The company is exploring the possibility of introducing CNG on its 1.0-litre turbo-petrol engine, which is shared across the Kylaq, Kushaq and Slavia. "We are working very aggressively on our CNG strategy. I think with the recent shift towards alternate fuels and especially CNG in many parts of the country, I think that will get accelerated," he said.

Skoda is evaluating the possibility of extending the powertrain across its compact portfolio. "The one litre engine and the MQB 27 platform is common across the Kylaq, the Kushaq and the Slavia. So, all three products are open," Gupta said. 

Gupta believes CNG could also work at relatively higher price points, challenging the traditional perception that the fuel is primarily targeted at budget-conscious buyers. "There is a potential for the right car at the right price point. And even in CNG it has moved from the utilitarian kind of a customer who wanted to buy a CNG. Today even premium customers are okay with buying a CNG car purely from the economic benefits they derive," he said.

The company is also evaluating whether it can retain the brand’s performance-oriented character with a turbocharged CNG powertrain. Gupta said the company has set maintaining acceptable performance as a key benchmark for any CNG solution it introduces. "That is something which we have given as a north star to our development team. With CNG compared to petrol, a 10-15% drop in performance is something which is acceptable to customers. Because they understand that CNG doesn't give you the same kind of output as petrol. So I have to make sure that I get the right product, right solution at the right value proposition at the right time," he said.

The CNG push forms part of a wider product and network expansion strategy as Skoda seeks to build on a strong growth phase. Gupta said the company doubled its sales last year and is now operating on a much higher base.

“From a year perspective if you look at it last year we had an almost 100% growth. So we have a very high base for last year and 100% growth doesn't happen every year. It comes with a new and when it comes we bring a new product into a new segment," he said. This year our focus, he adds, was on continuing the momentum. "The market continues to do much better than all of us anticipated. The market will end up close to 5 million this year which would be a 13-14% growth over last year," he said. 

The company is also expanding its sales and service footprint aiming to reach 200 cities by the end of the year.

“Last year we finished with around 175 cities and around 320 touchpoints. So far in H1 we have already expanded to 190 cities with 340 touchpoints. Penetrating deeper into India, penetrating deeper into demand centers within urban clusters as well will be the focus. Also, going to tier 2 and tier 3 towns which never had a Skoda presence. I think that is also giving us a lot of fillip," he added. 

Skoda expects to grow by 8-10% this year. Beyond CNG, Skoda sees a larger SUV as a significant opportunity for its future portfolio. Gupta said the company needs successors to the Kushaq and Slavia, while a three-row or larger SUV could address an increasingly important part of the Indian market.

"So if I look at it purely from a sales and marketing perspective, definitely first thing we need is newer powertrain options. I think the successors for the Kushaq and the Slavia naturally have to be there. Then an A-SUV or a 7-seater is something which I would love to have in my portfolio. That's going to be the next big thing in Indian market," he said.