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Skoda's Upcoming Tata Nexon Rival To Get 76% Localised Components
Skoda Auto India is focusing on localisation to keep prices competitive for its upcoming compact SUV. Skoda Auto CEO Klaus Zellmer revealed that the sub-four-metre SUV will have 75-76% local content, allowing the company to pass excise benefits onto customers.
Skoda had previously aimed for 95% localisation in its India 2.0 products, such as the Slavia midsize sedan and Kushaq midsize SUV. However, the 1.5 TSI engine and 7-speed dual-clutch automatic transmission are not yet fully locally made.
Learning From Past Mistakes
Zellmer acknowledged that over-engineering was a misstep in the Indian car market and that Skoda's new lineup, including the compact SUV slated for launch by March 2025, would address this issue.
He emphasised the need to find the sweet spot between quality and price to cater to Indian customers' preferences. The company plans to capitalise on aspects like driving experience, fit and finish, sustainability, and safety to increase sales volumes.
Cost Reduction Through Localisation
To reduce costs, Skoda intends to scale up sourcing from local suppliers and increase localisation further. Zellmer noted that one of the engine derivatives (the 1.0 TSI) is now fully built in India, highlighting procurement and localisation as key strategies moving forward. The new compact SUV will be based on the MQB A0 IN platform, which has been specifically developed for the Indian market outside Europe.
Production and Export Plans
The upcoming compact SUV will be manufactured at Skoda's Pune plant alongside the Kushaq and Slavia models. With an annual production capacity of 2.7 lakh cars for both Skoda and Volkswagen combined, Skoda Auto anticipates potential annual volumes of over 90,000 units for domestic and export markets. The brand aims to expand its presence in Southeast Asia, the Middle East, North Africa, and the Commonwealth of Independent States.
Skoda Auto India is focusing on increasing localisation levels to maintain competitive pricing for its upcoming compact SUV while learning from past mistakes in over-engineering vehicles for the Indian market. The company's cost reduction strategy involves scaling up sourcing from local suppliers and increasing localisation efforts across its product range.
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