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Old 14th November 2012, 00:02   #61
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Originally Posted by lapsi

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Agree, but buyers should be aware of the entry level status of the brand in the country of origin.

And that is why Skoda needs to lower prices since there is no scope for VW for increase theirs.
My 2 cents on this statement which I think is incorrect. Not because I own a skoda but because a potential customer should be aware of the reality before making a choice.

In the country of origin, skoda sure is a brand that a commoner would resort to since maintenance costs may not be as high as it is here. Come to think of it..doesnt that entry level brand rival or compete tete-a-tete with some mid level domestic models? Compete would be an understatement IMO.

For example, the camry from the toyota stable is a luxury model here. But abroad, like the mid East or west, the camry is yet another commoner's steed. But that fact does not beat down the notion of luxury that the camry exudes.

Premium feel is always based on comparison. The domestic brands and models have contributed heavily to this current premium attribute that europeans bask in. So you re right about the 'one-eyed' statement. But for that to be defeated, the domestic brands will need to outdo the europeans at the sane price point.
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Old 14th November 2012, 09:20   #62
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^ Not just the Camry, many other cars and brands that call themselves "premium" in India are considered budget brands elsewhere. I distinctly remember Honda's (and Honda fanboys') claims about numbers not being a matter of concern (when Jazz and City sales were on a downward spiral) for the company, as if they were hand-crafted luxury meant for a select few. A few months later came the price cuts.
Nowhere in the developed world are Toyota, Renault, Nissan, etc considered "premium". But for a country where many people have never been in a car - let alone having owned one - I guess any manufacturer can claim to be "premium" and justify that claim to some extent.

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Old 14th November 2012, 09:33   #63
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I think it might make sense to downgrade Skoda. This is why.
The vw group in India need higher volumes. They have been recently hammered by the Nissan Renault alliance in terms of market share. Even Nissan will be launching Datsun to compete in the low end of the market.
For vw it makes sense to reposition an existing brand that customers already identify with as well built and sturdy machines.
With higher volumes from a lower priced Skoda and premium offerings in the vw avatar, they will have products across the spectrum.
Maybe vw cars won't sell in as many numbers as Skoda, but that is the distinguishing factor between a volumes plater and a premium player.
I am not making any comment on the service levels of either Skoda or vw, only an opinion on the repositioning exercise.
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Old 14th November 2012, 09:51   #64
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Default Re: VW to Reposition Skoda Brand in India

Quote:
Originally Posted by lapsi View Post
Agree, but buyers should be aware of the entry level status of the brand in the country of origin.
Well in that case, what Skoda is in Czech is similar to what VW is in Germany, or what a Proton is in Malaysia. I don’t see a huge difference in status there


Quote:
Originally Posted by mempheS.D View Post
For example, the camry from the toyota stable is a luxury model here. But abroad, like the mid East or west, the camry is yet another commoner's steed.
Completely agree.

A bit OT – reminded me of a conversation I had with an ex-colleague (French national) in Bangkok a few years back. Talking about car crazy Thailand, I asked him why he opted for a Japanese car instead of a Mercedes or some other European brand. And he answered “No big deal, Mercedes is a regular taxi in my country”.

Just mentioned this to illustrate that perception on luxury varies across countries / regions.
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Old 14th November 2012, 10:37   #65
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Default Re: VW to Reposition Skoda Brand in India

Quote:
Originally Posted by lapsi

The same needs to be done with Skoda. The customers should call their bluff and treat it as the entry level European brand that it is.

The strategy is simply to align their brands in accordance with their international standing. I do not think ego has anything to do with it.
The bluff is that VW is somehow inherently better, its not, when the technology,platform, materials and everything else is shared. The customers saw through that. The Superb is at the top of the game because bigger is better in the Indian market, a cramped Passat will not be able to dent its position. The only VW can do is make the Superb less of a value proposition, it seems they are already at work.

Ego has everything to do with it, when your Eastern European subsidiary is seen as better than a German product, you wonder how you can fool people into thinking your brand is somehow better. So many years of trying and still VW hasn't figured out how to do that. Like it was mentioned earlier in the thread, customers decide a brand's positioning not the company.
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Old 14th November 2012, 15:14   #66
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Default Re: VW to Reposition Skoda Brand in India

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Originally Posted by lapsi View Post
Skoda is a cheap, entry level, European brand but it looks like the stuff available in the market was of such poor quality that the basic product offered by Skoda was perceived "premium". It reminds me of the saying: "In the land of the blind, the one-eyed man is king".
Yes Skoda is an "entry level European brand" but it is a long way from being "cheap". Yes it used to be perceived as a troublesome East Bloc piece of junk rather like Trabant, some 20 years ago.

However, over the last 15 years, they have slowly but surely reinvented themselves and today certainly make good quality, well finished, safe and clever cars.

Even the notoriously sarcastic but yet expert and reasonably discerning, highly experienced Jeremy Clarkson grants them this much so I would look askance at your statements.

Yes to the statement that in the land of the blind, the one eyed man is king. You can imagine the absolutely primitive standards that we Indians have been used to right upto this last decade! Of course, Skoda will come across as Premium here, compared with Suzuki and Hyundai and so on.

If you call Skoda "cheap" and "entry level", then I shudder to think what you will label the typical Suzuki, Hyundai, Toyota and others!

Or perhaps your personal standards are really very high compared to us lesser mortals, which, if so, is by no means wrong!

What car(s) do you own, just for academic interest?

I would submit here that in ref to the pricing, they are not so very much off their pricing in Europe. Very comparable in fact, on account of the SKD/ CKD mode(s) of manufacture!

This fact is amply illustrated elsewhere on the Forum so I wont repeat the details here.
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Old 14th November 2012, 15:39   #67
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Default Re: VW to Reposition Skoda Brand in India

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Originally Posted by shankar.balan View Post
Yes Skoda is an "entry level European brand" but it is a long way from being "cheap". Yes it used to be perceived as a troublesome East Bloc piece of junk rather like Trabant, some 20 years ago.
So true Shankar. I think I posted this somewhere... One of our Senior directors is based in Paris and when I told him in course if a casual chat that I recently purchased Skoda Yeti. He said do you know a local joke on Skoda? I said no... He adds, tell me how to double price of your Skoda car? Just top it up with fuel.

Not sure what he drives but I know he maintains a small aircraft as a hobby somewhere in south of France. I brushed the comment away as for me it's very smart car and my prized possession.
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Old 14th November 2012, 15:51   #68
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There is a bit of disconnect in this thread about VW and Skoda, and that somehow VW is out to get Skoda! They are part of the same group, these are business decisions to ramp up volumes.

VW owns and runs Skoda and has improved Skoda's perception, build and quality levels since the purchase. Look at some of the early re-positioning work done for Skoda in Europe. Skoda was perceived as a third grade eastern european brand when VW bought it. Look at it now, its take far more seriously.

Last edited by Vid6639 : 16th November 2012 at 15:29. Reason: deleting duplicate post
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Old 14th November 2012, 16:01   #69
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Quote:
Originally Posted by samyboy

So true ocal joke on Skoda? I said no... He adds, tell me how to double price of your Skoda car? Just top it up with fuel.

Not sure what he drives but I know he maintains a small aircraft as a hobby somewhere in south of France.
The joke that he shared is an old 1989 Trubby joke about the East German Trabants!

Well I guess if he is a big shot he may not consider a Skoda etc but that still doesnt take away from the fact that the brand has completely reinvented itself in modern times!
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Old 14th November 2012, 16:25   #70
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Default Re: VW to Reposition Skoda Brand in India

Well, if that's the case, the Volkswagen was actually brought about as a cheap car. Hitler wanted to make a car that the common man can use with no complications, very little maintenance and can be used in any environment. That gave birth to the original beetle. However, VW has evolved and now makes quite some good cars. Skoda must have evolved in a similar fashion that they make good cars to have!

I recall seeing Audis in my childhood which were simple and plain cars which noone really cared for. They were also ugly compared to the Nissans/Datsuns and Toyotas. However, these are prestigious cars now!

So its just a matter of the company's evolution and perception of the public!
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Old 16th November 2012, 09:18   #71
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Default Re: VW to Reposition Skoda Brand in India

The tank VFM Octavia gave Skoda such a solid start in India. I recall Skoda launching it at the same price for both Petrol and Diesel. Where would that leave one now?

The Octavia was such a performer in India that when there came a time to replace it, Skoda buckled. And Skoda introduced the new Octavia as Laura and sold both generations side by side. It is not an uncommon practice in our country. MSIL has mastered the act.

But, I think selling 2 generations side by side give many long term headaches. This strategy of milking the market never let's the newer model to achieve the full potential. You can never price it as competitively as you can and there will be a lack of focus. And the Laura just moved up the segment.

Now, VW finds the gap (between Skoda and the next segment) too small to position itself.

I am watching with great interest how they are going to unfold this.
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Old 16th November 2012, 13:04   #72
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Default Re: VW to Reposition Skoda Brand in India

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Now, VW finds the gap (between Skoda and the next segment) too small to position itself.
Very true!!! Even in the European market, the VW products are higher than the corresponding Skoda offering merely by a whisker. In fact, many a times, the trim levels of Skoda are better than what VW's own product offers (read Laura L&K and Jetta Highline AT). I am not so sure if that is the right way to position your brands.

In my opinion, VW could done a better job if they would have staggered their's and Skoda's products on different segments rather than compete in the same segment like the way they have done it for Audi.

For instance, a line up like the following would have made the offering lineup of the combined VW group more complete and would have steered clear off the issues of brand cannibalization.

Skoda: Citigo
VW: Polo

Skoda: Fabia Scout
VW: Golf

Skoda: International Rapid
VW: Jetta (de-speced with the 1.4 TSI engine and prices reduced to <15L OTR)*

Skoda: Laura L&K (like)
VW: Passat

Skoda: Yeti
VW: Iconic Beetle
VW: Touareg



*So it looks like VW's own product is the one that needs re-positioning downward
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Old 16th November 2012, 14:17   #73
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Default Re: VW to Reposition Skoda Brand in India

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Originally Posted by xplorauto View Post
Very true!!! Even in the European market, the VW products are higher than the corresponding Skoda offering merely by a whisker. In fact, many a times, the trim levels of Skoda are better than what VW's own product offers (read Laura L&K and Jetta Highline AT). I am not so sure if that is the right way to position your brands.

In my opinion, VW could done a better job if they would have staggered their's and Skoda's products on different segments rather than compete in the same segment like the way they have done it for Audi.

For instance, a line up like the following would have made the offering lineup of the combined VW group more complete and would have steered clear off the issues of brand cannibalization.
Not sure if I understood what you are trying to say. Pit Citigo against the Polo, or Fabia against the Golf? Still they will have those multiple cars under the same platform right?

And in Europe it’s not just two brands. For eg; in the entry level hatchback space, they have 3 cars with minor price difference – VW Up!, Skoda Citigo and SEAT Mii. On the Polo platform there are VW Polo, Skdoa Fabia, SEAT Ibiza, and the Audi A1, the A1 of course in the premium band. It actually works pretty well for the group without much of brand cannibalization.

In India, IMO it’s not Skoda who is eating into VW’s sales. It’s more like a wrong diagnosis of a disease, and doing treatment for that. VW brand will see improvement if they channel their thought process into better service infrastructure, reduced ownership cost and enhance customer experience. After all, they do have a good product portfolio.
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Old 16th November 2012, 14:56   #74
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Default Re: VW to Reposition Skoda Brand in India

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Not sure if I understood what you are trying to say. Pit Citigo against the Polo, or Fabia against the Golf? Still they will have those multiple cars under the same platform right?
What I'm saying is this:

Do not let the brands compete in exactly the same segment like the way it happens today with the Fabia and Polo, or the Vento and the Rapid. If you do, there is always a risk of cannibalization. Instead, stagger the brands' offerings in slightly different segments a notch above or below the other.

So if VW wants to peg Skoda below their own:

Launch the Citigo from Skoda, but do not launch the Up in the same segment. Instead launch the Polo from VW at a segment higher. Similarly, if you have the Polo, do not get the Fabia from Skoda. Instead bring the Fabia scout. Again go a segment higher with VW by bringin in the Golf. Likewise, if you decide the lauch the Rapid, then do not bring the Vento; instead launch the VW Jetta at a slightly more competitive price point.

The basic idea is instead of de-speccing and re-positioning any brand downward, launch the products in seperate staggered segments and let every offering in their respective segments be well spec-ed vis-a-vis competition from outside the VW group

I hope this clarifies. Its just my thought on how product portfolios from sister brands can be cleaner, well distinguished and yet complete...as they say

'M.E.C.E.' i.e MUTUALLY EXCLUSIVE CUMULATIVELY EXHAUSTIVE
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Old 16th November 2012, 15:59   #75
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Quote:
Originally Posted by nitinbose
I recall seeing Audis in my childhood which were simple and plain cars which noone really cared for. They were also ugly compared to the Nissans/Datsuns and Toyotas. However, these are prestigious cars now!

So its just a matter of the company's evolution and perception of the public!
This is so true. Before Audi reinvented itself and became part of the big three Germans, it used to make some oddball ugly ish cars.
Those days the Beemers and Mercs really ruled the roost.

Does anyone remember Ravi Shastri's Audi 100 as a top class Premium car? Had he been given a Merc at that time instead, I think he himself would have probably appreciated it more because the Mercs of that era were in a completely different class to Audi.
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