Skoda Auto
1996. A relatively unknown company in the middle of Czechoslovakia (now Czech and Slovak) took the bold decision of entering the Indian market. While their decision was "bold", what also made it something worth pondering over was its ability to build a new product. Grounds-up.
Here is the story of a brand you and I probably never heard of until it entered India. Skoda Auto is a case of a brand brought from the depths of the unknown to a state today where it enjoys healthy brand equity across Europe and Asia.
1991 and Skoda is taken over by the VW group. 5 years of relentless cost-cutting, technology improvements, plant revitalisation and new product development led to the development of the Skoda Octavia. The Skoda Octavia was designed around the famed VW Golf platform. Armed with a quality product to support the existing Skoda Felicia, Skoda did a soft launch in European markets and started to receive rave reviews from the word go. For a company, who's product line never really got the thumbs-up from customers, especially in terms of quality, this was a giant step by it. A gamble which if it hadn't taken off would have probably signed the death-knell of the company.
Skoda Auto India- Brief History
What's important to our story though is Skoda Auto India and the journey it has taken to become one of the most respected brands in our country. In 1996, Skoda did a due deliberation of entering the Indian market with its all new Skoda Octavia (A4). Back then, it decided to enter the Rs. 6-8 lakh segment with the 1.6 litre, 100 bhp Petrol version. They were looking at local assembly of the car. Initially they tried to enter in JV with a North India based Automotive group, but failed to do so as the 2 partners couldn't agree on the terms. Also quality levels that the VW group demanded couldn't be met by most of the ancilliary and accessory manufacturers within our country. This delayed the Skoda Octavia's launch for another 5 years, even then it was launched as an SKD.
Late 2001, Skoda launched the Skoda Octavia in the Ambiente trim in 2 engine versions. 1.9TDi and 2.0 MPFi. The 1.9 TDi engined Octavia to date is its largest selling car in the country and at one point in time constituted 95% of all Skoda Octavias sold in India. The 2.0 MPFi alas hasn't managed to make a mark in its segment. The initial response to the car had been fabulous. Starting off with nearly 300 cars a month, Skoda today sells nearly 600-650 cars on an average every month. This has been possible through the constant expansion of its dealer network and improvement in services, coupled with product variants such as the Elegance, the L&K, the Rider and the RS, all launched with a span of the last two years.
Today Skoda Auto not only sells the Octavia, but has also launched the Skoda Superb, a D-segment luxury sedan with a 3.0 litre 190 bhp Petrol engine. Also since its launch, Skoda has shifted from being an SKD assembler to a CKD assembler since early 2003 and the Octavia today sports a 40% local content, testament to the fact that Indian suppliers have come a long way in terms of quality and delivery since 1996.
While these are just facts about the brand's history in India, let's look at reasons why the Octavia and Skoda have been successful in India.
First up, the size of the Skoda Octavia is perfect in terms of size. Slots itself right in the Lancer and Honda Accord it tries to offer the best of both worlds. Its not too big to make it difficult to maneouvre and neither is it too small to be uncomfortable. As a C++, entry D-segment car, it really pioneered the segment by offering class leading features and quality levels that a segment above and below couldn't offer.
Which leads us to the sense of indestructibility that the Skoda Octavia has. Right from the moment you open that door, you know you are in a quality automobile. The door itself needs some effort to shut for first-timers, making it clear that you are cocooned in a shell of safety. To add to that feeling is the 4-star rating it has received in the Euro NCAP, proof of a fact that lies right in front of your eyes. The front seats offer adequate lumbar support making long drives an ease. The dashboard, though a bit too grey for the tastes of a lot of people, feels strong enough to last the vagaries of child, adult and cleaner abuse. The steering wheel feels compact and sporty, the chrome dials in the higher versions providing relief to your eyes. Its trip computer offers you varying information in terms of trip distance, average fuel consumption etc. What really is the highlighting point though is that cavernous boot. At 528 litres it really can swallow your entire family's cupboard. Though it is also the reason for complaint, especially since it eats away into rear-seat space and legroom.
On the move the car continues with that sense of indestructibility. The rough-road package really takes on the potholes with as much aplomb as corners making it a great ride-handling compromise. Its ride-height though is what impedes its progress, making speed-breakers a bitta troublesome to conquer. Nevertheless, careful drivers shouldn't have a problem. Even then, Skoda has offered sump guards to protect your car's vital moving parts.
The 1.9TDi though is a dream. With 90 bhp to boot, it really is quite a powerful diesel engine, even though it isn't a CRDi. The RS though is in a different league altogether. 148 bhp from a 1.8 Turbo Petrol, it whisks the car to 100 from standstill in a little over 8 seconds and tops-out at 220 kmph.
Finally though, the reasons why the Octavia as product has succeeded is clear. Size is right, the engine is powerful yet frugal, but most importantly it feels like its been built from a single slab of granite. Tough all around, its ideal to deal with the Indian conditions. Some of the few reasons why 8000 people every year lap up the Octavia and trust it for themselves and their families.
Branding,Marketing and Advertising
The name. Its been the bone of all problems for Skoda. If you notice, like Hyundai it has suffered the same problem of being mispronounced. Some "Czech experts" in our country called it Koda, others as Skoda. But the true pronounciation is Shkoda. Notice, right above the S is a flick. Not that I am an expert of the language, it clearly demonstrates that it isn't normal pronounciation
A great marketing guru once said that "90% of all advertising is a waste". Skoda's advertising though falls in the 10% bracket, the "not a waste" one. When Skoda planned to enter the Indian market, they as usual, went and asked agencies to pitch for their account. A relatively small Mumbai based ad-agency called IB&W won the account. Their focus was simply to highlight the quality product that the Octavia is.
The baseline/tagline or slogan in common lingo was "The most well built car. In 1.9 TDi and 2.0 MpFi.". The headlines started first with "Namaste India", and then followed on to headlines such as "The driver's seat curves in all the right places. So your back doesn't curve in all the wrong". All of which highlighted the features of the car. Advertising does a beautiful thing which other marketing tools can't. It subconsciously creates an awareness and liking for a brand which eventually turns into loyalty. And that's what these ads did.
IB&W's Creative Director, Mr. Ganesh Balasubramaniam and his team were instrumental in making the brand a success. My meeting with him really made me see through what goes into creating such great ads. The man's total commitment to quality has shown that even though the account moved on to Orchard in early 2003, it came back to IB&W six months later since Orchard could never replicate the success that iB&W brought to Skoda. They are a very small team of 4-5 people, but this crack creative team have really shown how good ads can generate sales.
Of course besides great ads, word-of-mouth marketing brought the brand to an icon status. People were happy with the product and were also slowly getting pleased with the ever improving service levels at the dealer and Service station end.
Sure, given Skoda's success in India, one would really expect them to launch cars quickly. But their policy seems to be one where they carefully test market and launch their products. With a 15,000 unit capacity plant at Shendra, Aurangabad, Skoda really now has upped the ante on its competition. Its carved a niche position for itself, one that offers good quality products at competitive prices. It enjoys a very good brand equity today, all in a short span of 3 years.
Sometimes it isn't always about a breathtaking product. Or sales alone. Its about values that the brand stand for. Its about offering the customer the best service he deserves. Its about getting a good product with good sales-support, a brilliant marketing campaign and honest intentions to stick around. That's what makes Skoda one of India's most loved car brands.
Revvmaster