[su1978]

Originally Posted by nitinbose

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.

Hey Nitin, you hit the nail right on its head. Being in IT industry, it is probably the same thing that HP did to Compaq. Now we have HP everywhere and Compaq no-where.

But i think that story at VW is no better. Please correct if i am wrong. Also on the sales front, i have heard that customers who opt for Polo are either ignored or are pushed to purchase Vento. I myself have been a victim of this attitude of VW. Kept sitting inside their showroom for about 30 minutes but none of the executives turned up. Everyone was on lunch. Atleast the sales of Skoda was much much better. They treated me well and offered test drives of both petrol & Diesel Fabia. Even the follow up was very good. But again thanks to TBHP, which completely helped me change my opinion and i opted for Maruti.

[diffsoft]

Originally Posted by GTO

Skoda is definitely in trouble in India and their reputation is killing them.

Skoda's reputation in all likelihood is well-earned and well-deserved. And it's killing VW's reputation as well I guess.

I doubt very much though that just having a premium positioning can be profitable. If premium means D segments and above (Yeti, Octavia and Superb) then the volumes won't be high enough to sustain its dealers - even if the current 108 comes down drastically. In general a reasonably profitable car dealer in India expects car sales to just break-even or a little above and relies on A*S*S to make margins.

Selling fewer high end cars mean same / higher frontage costs (I mean a Superb buyer will not want the showroom to look like Maruti's, ala City Market in Bangalore, but like a sophisticated mall) but not more volumes. VAGs 'once-a-year' service and costlier, imported and sporadically available spares means reduced revenue prospects from A*S*S. So business-oriented dealers may scamper.

A Superb / Octavia buyer will have compelling choices because he will be more price inelastic and will demand much higher service and accountability. So reason may beckon him either to Jetta / Passat or to the Bimmers / Mercs / Audi.

Globally Skoda will not service India on priority because India's too puny for their attention; and that will show in spares - even if shared, so their service will be an issue.

Cheers,

[HyperRetard]

Originally Posted by nitinbose

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.

You, my friend have ignored quite a few things in this equation.

a) That Skoda was already a almost dead brand. Heck, it was considered a joke, almost like the Lada and our very own HM.
b) That if they had to build a brand, they would be better off building VW brand itself, rather than build a brand, then kill it.
c) Skoda has its own CEO, its own dealerships, its own service stations. And VW doesnt and cannot interfere in a completely independant enterprise's functioning. It can give them worse models and interfere in the spec sheet, but it cannot tell them to provide worse A.S.S.

Originally Posted by Equus

But how does making Skoda the scapegoat help?

You are right. It doesn't help. But Making Skoda the scapegoat ensures the Parent/Whole brand doesn't get a Bad Name Now only Skoda is at blame. Not VW. (At least in their minds.)

Originally Posted by GTO

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.

Actually, VW blunders are much bigger than Skoda's in my opinion. Skoda gave the dealerships to a single brand which contributed heavily to their bad reputation. VW didnt do this mistake, but did something big.

VW entered the market with *premium* ness. Everywhere. Just have a look at SA's or sales advisors of VW and of MS. Lots of differences from head to toe. MS guys are on worn out clothes, neatly washed, humble to do their job perfectly, where as VW guys were treated royally by the brand and they treated the Brand in the same way, pampered the brand without doing much.

VW sells cars at around same prices of what their Jap counterparts sell. VW should have acted just like any other brand, but they acted like MB which is why they failed.

[veyron_head]

I would have thought VW would keep Skoda alive and kill the mother brand in India. Though Skoda horror stories are more than VWs (close race though!), Skoda has some brand equity in India which VW doesn't have. Only the polo did better than its Skoda cousin, the fabia. The others - Vento, Jetta/passat were never a match for Rapid, Octavia or the superb.

My recipe for VW would be to move Polo,their only successful car (comparatively), to the Skoda umbrella and kill the VW brand in India. Polo can still be sold as VW polo in Skoda showrooms, who cares. This would give them a lot of bandwidth to focus on cleaning up Skoda's ASS, the only bottleneck for the brand which otherwise makes good cars.

[blacksport]

Skoda closing down would be a sad news for at least a small percentage of the car buying public. After all, not everybody's idea of a car is a box with four wheels which would take you from place A to place B. With all the drawbacks these cars possess, some people see in these cars, certain virtues that goes beyond the ones that the mass market yearns for.

Almost all brands that make worthy cars for enthusiasts are in bad shape, be it Fiat, Ford, VW or Skoda. I seriously think that these brands should stop chasing the mass market and concentrate on their strengths, even if that means making cars for niche segments.

[sivadas]

Originally Posted by nitinbose

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.

Are you talking in the Indian context? As you are probably aware, Skoda is a brand owned by VW since 1991. Obviously India was not in picture when the 'purchase' happened.
VW was mostly testing the waters (in India) with Skoda brand and they were richly rewarded in the initial years. By the the time parent also jumped in, (unfortunately) child had spoiled its reputation

[TheLizardKing]

Originally Posted by GTO

No brand can be everything to everyone.

Originally Posted by TheLizardKing

It is naive to expect a brand to be all things to all people.

Great minds!

Originally Posted by gemi_kk

VW should have acted just like any other brand, but they acted like MB which is why they failed.

Any other brand? You my friend have thrown just about every known marketing principle out of the window. The Volkswagen brand, or for that matter any other brand, is valuable only to the extent that it has a definite positioning in the customers' minds. Take that away and all you are left with is a meaningless symbol.

[HyperRetard]

Post deleted by the Team-BHP Support : Please do NOT post messages that add little or no informational value to the thread. We need your co-operation to maintain the quality of this forum.

Please read our rules before proceeding any further. We request you to post ONLY when you have something substantial to add to a discussion.

[nitinbose]

Originally Posted by sivadas

By the the time parent also jumped in, (unfortunately) child had spoiled its reputation

I believe that was done intentionally. Both VW and Skoda have similar cars in the same segments, such as Fabia (discontinued) and Polo, Laura & Jetta, Passat & Superb, though the Passat has some enhancements over the superb and in between the A4 & Superb. The only car that stands out would be the Yeti. So there's no real sense in continuing both brands at the same time. Hence they took gradual steps to bring skoda down.

[pgsagar]

Originally Posted by diffsoft

Skoda's reputation in all likelihood is well-earned and well-deserved. And it's killing VW's reputation as well I guess.

Globally Skoda will not service India on priority because India's too puny for their attention; and that will show in spares - even if shared, so their service will be an issue.

Cheers,

India too puny for Skoda's attention? We have Lamborghinis/Ferraris, Astons/Bentleys/Rolls setting up shop here and you say India is too puny for Skoda? So, is Skoda even above these brands? You appear very much smitten by Skoda brand.

Skoda had a dream run with first gen Octavias and Lauras. But born-again Octavia failed to resurrect that. And if a new car fails to ignite sales charts in its 1st year, it seldom does so in its 2nd year.

[sivadas]

Originally Posted by nitinbose

I believe that was done intentionally. Both VW and Skoda have similar cars in the same segments, such as Fabia (discontinued) and Polo, Laura & Jetta, Passat & Suberb, though the Passat has some enhancements over the suberb and in in between the A4 & Superb. The only car that stands out would be the Yeti. So there's no real sense in continuing both brands at the same time. Hence they took gradual steps to bring skoda down.

Not really! I feel VW was trying to apply their global strategy (maintaining both brands together, but positioned at slightly different levels)in India also. But in India, Skoda had already established as (relatively) premium brand. With very limited volume in each of these segments, now VW group is probably trying to realign their strategy with these brands (VW & Skoda).

[arnabchak]

Skoda had the recipe to be a leader in the C2/D1 segment.

When the initial Octavia was launched, it was a highly desirable product and Skoda as a brand enjoyed a great aspirational effect.
They have themselves to blame for the downfall. Poor press and equally poor customer service resulted in the downfall.

Yet, I sincerely feel that more than Skoda, VW themselves are in a deeper pit.

Ventos are sort of slow sellers compared to the Rapid.
And their Jetta sales are out numbered by the Superb(which in all aspects even looks and feels a better product).

Its more on these lines- "Is this the beginning of the end of VW, as a group?"

Incidentally, they donot have any fresh offerings in the pipeline and their current product line is dated and uninspiring.

[a4anurag]

Originally Posted by GTO

Equally, I don't see anything wrong with Skoda choosing a 'premium' position & abandoning the mass market.

It may be sounding like a defeat but it is 'best' IMO to work in the segment that a brand is the master. Skoda can try and refine things in the 'premium' segment so that it garners better sales.

Similar to what TKM announced regarding the small car segment.

No brand can be everything to everyone.

Exactly, if one brand is success in all the segments then it is because of:

1) Herd mentality

2) Ultra appealing portfolio that appeals every customer so that they need not go anywhere else.

An example, the Kizashi by Maruti which didn't click so it was discontinued and more focus was diverted towards the mass market segment.

This is what Skoda is doing.

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.

VW is using Skoda like a guinea pig brand by launching cars in ALL segments. Once the response is found, they want to stop the brand in the mass-market but continue in the premium space where they do well.

Anurag.

[diffsoft]

Originally Posted by pgsagar

India too puny for Skoda's attention? We have Lamborghinis/Ferraris, Astons/Bentleys/Rolls setting up shop here and you say India is too puny for Skoda? So, is Skoda even above these brands? You appear very much smitten by Skoda brand.

Skoda had a dream run with first gen Octavias and Lauras. But born-again Octavia failed to resurrect that. And if a new car fails to ignite sales charts in its 1st year, it seldom does so in its 2nd year.

Skoda India after 13 years of operations sold 900 cars last May, most likely at a loss. Skoda world-wide sold about 91,000 cars in the same time and they have been profitable. India accounts for only 1% of Skoda sales world-wide despite being around for more than a decade that saw India's highest economic growth ever. 1% is getting close to a round-off error and hence puny.

No doubt India's potential is great but that can be better exploited by VW parent brand which has the portfolio and the depth of investment needed to sustain in this hyper competitive market.

The luxury car makers you mention see India making sense to them because they will sell to the uber-rich even if they are in Liberia. For instance Ferrari sold only about 7000 cars world-wide in 2013. So even if they can find 70 customers in India with some effort they will move their global sales by a full % when their growth is only 4%. To find 70 customers for Ferrari in India may not be that tough whether they price it at 1 crore or even 10 crores. So Ferrari will not lose money.

Nett what makes sense for Ferrari may not make sense to a Skoda.

Cheers,