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Old 25th June 2014, 11:58   #1
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Default VW likely to curb Skoda India's operations

At last VW has realized that they are betting on a lame horse. As mentioned in this article which was published in today's Times of India, Delhi edition, VW has accepted that Skoda has not been able to capture more than 0.8% of market since 2001.

Source & Full Article: Times of India

Quote:
Volkswagen may limit the operations of struggling group company Skoda in India as the brand has failed to get volumes despite a long presence in the market.

Mahesh Kodumudi, president and managing director of Volkswagen Group India, said that new strategies are being considered for the Czech car brand that was the first within the VW group to set foot in India around 2001 but has not managed to cut much ice with customers, managing a poor 0.8% share at the end of 2013-14. "We are re-aligning our Skoda strategy... we are looking at it," Kodumudi who is India in-charge of Volkswagen's brands like VW, Skoda, Audi, Bentley and Lamborghini told TOI in Pune.
Quote:
He, however, added that there is no plan to pull out the brand from India or to scale down its operations in a big manner.
As per me and even many members on this forum, the whole and sole reason for their failure was taking the indian customers and markets for granted. Their lax attitude and a desire to take us for a ride has cost them dearly. Will not be surprised if VW also meets the same fate 10 years down the line.

Let me take a very simple example of LG and Samsung products success stories in india. Amongst homegrown giants like Voltas and Videocon, they made their presence felt due to their highest quality of service and an urge to satisfy customers. Maruti and Hyundai are well known examples.


Request to Mods: Please merge my thread into another if similar one exists.

Last edited by GTO : 25th June 2014 at 13:24. Reason: Keeping the fair usage policy in mind, it's best to share an excerpt + link to full article. Thanks
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Old 25th June 2014, 12:20   #2
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Default Re: VW likely to crub Skoda Ops

This certainly is no big surprise considering the low sales and bad press on service issues. I wonder what 'curb' means. With the current limited portfolio it doesn't look like they have much room to prune further. Will they do a tactical withdrawal (like the Opel brand), maybe temporary, leaving the field clear for the VW brand to go all out? Should be interesting.
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Old 25th June 2014, 12:26   #3
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Default re: VW likely to curb Skoda India's operations

Strange, that.

I always thought the Rapid outsells the Vento.
The Laura and Octavia definitely outsell the Jetta.
And the Superb outsells the Passat.

So if anyone should take a curb, it is they themselves.
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Old 25th June 2014, 12:26   #4
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Default re: VW likely to curb Skoda India's operations

VW should just merge the operations and showrooms/service outlets of Skoda into the VW brand and sell a single brand in the non-luxury segment. Everybody knows that a Skoda is basically a VW car with VW engineering and technology so who are they kidding.

Of course, even that is going to take them nowhere unless they change their attitude towards Indian customers and take service and reliability/warranty issues seriously.
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Old 25th June 2014, 12:28   #5
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Default re: VW likely to curb Skoda India's operations

'Group' strategy aside, is the VW brand of cars doing that much better than the Skoda moniker in our market?

If by 'curbing' they actually mean 'withdrawing', I hope it's not a temporary fix. Getting back into the volume market later on would be nearly impossible due to their legacy 'reputation'. What ails them isn't really a Skoda or VW problem. It's an attitude issue with the whole group. So does that mean they'll pack up the entire low/mid-range offering bunch and focus high-end only? A.S.S. horror stories are beginning to emerge for their premium offerings as well.

Classic case of overlooking the root cause and fixing the (wrong) symptom.
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Old 25th June 2014, 12:33   #6
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Default Re: VW likely to crub Skoda Ops

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Originally Posted by wilful View Post
This certainly is no big surprise considering the low sales and bad press on service issues. I wonder what 'curb' means. With the current limited portfolio it doesn't look like they have much room to prune further. Will they do a tactical withdrawal (like the Opel brand), maybe temporary, leaving the field clear for the VW brand to go all out? Should be interesting.

Most probably they would withdraw the brand from the market. But what happens to the existing customers? Everyone would acknowledge that Skoda does not provide such a bad product, albeit it is a different story for the service part. Most probably, as you rightly said, they are clearing the field for VW brand to spread its wings. But what would they do to change the dealers. I just hope they are not under the impression that the customer uses his car for 3 years and by that time VW would have closed India Operations.
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Old 25th June 2014, 13:03   #7
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Default re: VW likely to curb Skoda India's operations

Poor Skoda! As Chetan wrote, 'fixing the wrong symptom' is apt. If they choose to keep their ears & eyes closed, soon VW will meet the same fate in India. They simply cannot see (or choose not to see) that it is the after sales which is hurting the customers and ultimately the company. And why do they think that the market will spare VW (& only punish Skoda) if they continue with this attitude?
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Old 25th June 2014, 13:16   #8
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Default re: VW likely to curb Skoda India's operations

MODS,

This is a direct request to you guys to try and fetch some information for lesser informed like me. The article looked to be deadly serious on some tangible action over this matter.

The question is: What action? Does that mean a limited portfolio?, only concentrating on non value offerings such as Octavia, Superb and Yeti? does it mean a rejig at portfolio to try and capture more market share? does that mean completely withdrawing the brand from India? Some of this can have serious implications on new and existing customers..

I have a special interest because I have currently booked Skoda Octavia and am waiting delivery. Even though I am very sure of the product, it's no good if the brand itself is withdrawn. Guys, I need help and I need it now

Last edited by Abhi_Automobile : 25th June 2014 at 13:17.
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Old 25th June 2014, 13:20   #9
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Default re: VW likely to curb Skoda India's operations

Recent steps from VW remind me of Fiat's blunders in past . I agree they are 'fixing the wrong symptom'. If they continue with the same arrogance and lack of customer care, even their VW brand will have to shut shop some day.
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Old 25th June 2014, 13:38   #10
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Default Re: VW likely to curb Skoda Ops

I personally don't think they can shut down Skoda operations.

Similar thread back in 2012 http://www.team-bhp.com/forum/indian...and-india.html (VW to Reposition Skoda Brand in India)

Just a few utterances like this would kill what sales they already have. The Indian car buyer is hell bent on ASS. I'm hoping what they meant is that they are going to re focus the Skoda brand.

I will mail Sameer Kumar, Head of Press Communication, Volkswagen Passenger Cars India and see what he has to say about it.
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Old 25th June 2014, 13:58   #11
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Default Re: VW likely to curb Skoda India's operations

I think they bet big on Octavia and it didnt return (as much as they anticipated).
IMO, the real trouble is - they are neither mass, nor niche.
Got their mass strategy wrong with Fabia/Polo. And hardly any takers for Jetta/Passat.

But how does making Skoda the scapegoat help?
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Old 25th June 2014, 14:19   #12
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Default Re: VW likely to curb Skoda India's operations

Quote:
Originally Posted by Abhi_Automobile View Post
MODS,

This is a direct request to you guys to try and fetch some information for lesser informed like me. The article looked to be deadly serious on some tangible action over this matter.

The question is: What action? Does that mean a limited portfolio?, only concentrating on non value offerings such as Octavia, Superb and Yeti? does it mean a rejig at portfolio to try and capture more market share? does that mean completely withdrawing the brand from India? Some of this can have serious implications on new and existing customers..

I have a special interest because I have currently booked Skoda Octavia and am waiting delivery. Even though I am very sure of the product, it's no good if the brand itself is withdrawn. Guys, I need help and I need it now
Hi abhi, your anxiety is very much Genuine. But this also reminds me of some very old saying. One who learns from other mistakes is "indi-genius", one who learns from his own mistakes is "genius" and one who does not learn from even his own mistakes, what would one call him. Hence keeping the various horror stories in mind and the mental pain and agony that many forum members have gone thru, i would personally advice you to stay away from Skoda. There are many better products available from competetion which will be a very good VFM proposition.
Please also keep in mind that Sales boost the numbers just once but ASS keeps them bringing back. Also it is a widely known fact that in todays times of cut-throat competetion, acquiring a new customer costs lot more than keeping the existing one.

Rest depends on your choice.
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Old 25th June 2014, 14:29   #13
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Default Re: VW likely to curb Skoda India's operations

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Originally Posted by Equus View Post
I think they bet big on Octavia and it didnt return (as much as they anticipated).
I thought the Octavia is doing very well, and from I have spoken to the dealers is that they cannot fullfill the demand, with waiting periods in the range of 3- 6 months.

Superb Facelift is not getting much numbers, that is for sure, the rear-end does look ugly in the face lift (this could just be me)

Plus, there are rumors that Skoda is bringing in a proper SUV to take on the Fortuner.

Hope Skoda does realize that their cars are good just their ASS has to be more customer friendly. Personally, I feel in Chennai the quality of ASS is reasonably good but they lack the capacity to service the volume of cars, they desperately need another ASS Centre here.
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Old 25th June 2014, 14:35   #14
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Default Re: VW likely to curb Skoda India's operations

This must have been in their (VW's) minds for quite sometime and now they're publicizing it. The idea behind VW purchasing Skoda is to capture the market and slowly kill the brand, which explains why they've also been reluctant to improve their service and customer support.
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Old 25th June 2014, 14:36   #15
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Default Re: VW likely to curb Skoda India's operations

Skoda is definitely in trouble in India and their reputation is killing them. They're usually second last on the sales charts and, at times, last position too. What must be worrying them is their losing market share / sales over the years. Talk about moving backward!

Equally, I don't see anything wrong with Skoda choosing a 'premium' position & abandoning the mass market. The Fabia gave them a lot of grief and their incompetent dealers aren't capable of keeping a high volume of customers happy anyways. Then, there's the question of immense product overlap with VW.

No brand can be everything to everyone. VW has an umbrella of brands and can easily give each a unique position. The Superb's success has demonstrated the potential for Skoda as a premium brand, and the Octavia would probably be outselling the Jetta if it weren't for supply constraints (i.e. limited kit allocation for India). Skoda also has the new 7-seater premium SUV coming up which has the potential to be a game-changer (related thread (Skoda to bring new 7-seater flagship SUV to India)).

On a related note, it's not like VW has a clue about the mass market either. One would've thought they'd learn from Skoda's mistakes. Alas.

Last edited by GTO : 25th June 2014 at 14:38.
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