Skoda to enter compact SUV market in 2025, eyes 1 lakh annual sales by 2026

Czech car maker Skoda Auto has approved its next phase of investment for India, which will go into compact SUV and battery electric vehicles, says Klaus Zellmer, CEO of the company.

The new investment will not only lead to a 30% expansion of production capacity but also expand the addressable market for the brand to almost 50-60% of the fast-growing passenger vehicle market in the country.

With the addition of the compact SUV, Skoda Auto has set itself a target of selling 1 lakh vehicles and a 5% market share by the end of the decade.

The all new compact SUV for India will be launched in a year, and it will be based on the MQB A0 platform, which the company officials claim is developed for India. 

The MQB AO IN platform, debuting with the Skoda Kushaq in 2021, formed the crux of Skoda Auto India's strategy. It is the first platform developed by the company outside of Europe and tailormade for the Indian market, the press release noted. 

"The Made-in-India models built on the versatile MQB-AO-IN platform remain key contributors to delivering substantial volumes, which will be further driven by this all-new compact SUV, strengthening the diverse offerings of our Group brands," said Jan Bures, Executive Director, Sales, Marketing and Digital, Skoda Auto Volkswagen India.

Kickstarting its "new era" in the country, Zellmer says India is "a key contributor" to the brand's global growth, and the most "promising growth" market for years to come.

"India is very important to Skoda. We've just fixed our future investment strategy in terms of product enhancements for the existing range and are also adding new products both in ICE and battery electric options. We have a very solid plan to grow the Skoda brand in India and are targeting a market share of around five percent by 2030."

With this fresh investment, the capacity at the plant will increase to 2.5 lakh units from the current 1.8 lakh units.

Strengthening internationalisation potential 

The CEO claims that strengthening the India operations also strengthens the brands' wider internationalisation potential.

He added that about 50% of Skoda cars manufactured outside of the Czech Republic come from India, and the company's export strategy of India-developed Skoda continues to gain momentum.

"We are continually growing our capacity to respond quickly to the global market. It is clear that India plays a crucial role. Europe is important as a home market, but our strategic focus is on growing a new international foundation so that we can stand on two strong legs," the CEO elaborated.

Globally, Skoda sold more than 866,000 cars, posting an increase of 18.5% from the year before, and almost double the industry growth rate across global markets of 9.5%. During the year, the company also showcased the EV strategy with six new all-electric models in the coming years and also launched several new generations and updates to its ICE range.

Zellmer said its electric Enyaq is the foundation of its EV strategy globally, and the same is being tested in India. The Enyaq is already proving itself in a heavily competitive EV field in Europe and it was the best-selling fully electric car in Germany.

Piyush Arora, Managing Director and CEO, Skoda Auto Volkswagen India said, "After the success of the Kushaq and Slavia, we are expanding our reach with the upcoming launch of an all-new compact SUV, targeting the largest segment in India. Our R&D expertise in India has already enabled us to incorporate highly localised parts and components for our entire range."

"With the new compact SUV, we are furthering this strategy by systematically developing our local supplier base to provide parts and components of global standards and quality at competitive prices. We aim to actively participate in the evolving landscape of mobility in India. We remain focused on our expansions and further enhancement of the Group's wide portfolio of cars in India."