[netchef]

Originally Posted by diffsoft

My guess is Skoda can't help it - on the one hand, they import from Czech knocked down and just assemble here. And the Euro currency has appreciated vs the Rupee, so costs have actually gone up for them. On the other hand, they do not have enough volumes to develop local suppliers - so it's a double whammy. Whatever excise relief they had was withdrawn and the earlier CEO left in a huff.

They have been persistent though and trying to use their assets (and bring down costs) by sharing part of their assembly line with big brother Volkswagen.

The good news is that Fabia will now also be made form the VW plant in Pune with local content - so eventually prices may come down

Sorry for the long mail, but when I wondered why Skoda's pricing is so high this is the explanation I could come up with.

Cheers,

Diffsoft: Makes sense. What I wonder about is the dynamics between VW and Skoda. Years ago Skoda used to be a 'cheap' brand selling the cheapest car available in the UK. They've obviously changed their positioning since then, but what happens when they eat into VW brand territory.

Originally Posted by iraghava

Sirji, it's a Chicken & Egg situation at play. As long as they continue to have high prices (Cars & Maintenance) they can't have high volumes & when they want high volumes they can't have high prices etc. etc.....

So the question is who bends first? The manufacturer or the buying public? My guess is the manufacturer since he's the one who has to make the efforts to sell his cars in today's market especially since the customer has so many choices available.

Iraghava: Sir, is it at all possible a player could enter a market and not aim for volumes? (To me 'volumes' can have a downside. If a Rolls manages to sell tens of thousands of its cars from current levels of a handfull, will it still hold its cachet- will it be a 'Rolls'?) Does 'economies of scale' apply even to a Bentley or a Mercedes Maybach in some way, even if it's 20 cars p.a.? Or is a firm like Skoda forced to slide it's target category: aiming high when they are forced to launch expensive cars, and dropping their sweet spot when they manage to drop prices? Will this impact brand perception and hurt their brand equity in the long run?

Originally Posted by sbelekar

Hey netchef,

Congrats for your car and hats-off to your penmanship. Also the screen name that you have opted for makes me think that you must be blogging on other forums as well. Please share the links, if you do.
A question for forum here is, I have heard people saying that Fabia's engine noise will reduce drastically after 5K on the clock. How true is that? What is technical explanation for that reduction in noise?

Sbelekar: thank-you, Sir. I love to cook- a hobby that's therapy and fun and escape and passion rolled-in one, but haven't yet begun blogging anywhere. Shall let you know when I do.
As to the engine noise question, our fly Fabia is quite far yet from that milestone . My guess would be carbon build-up that buffers moving parts and changes acoustics as well. It's only a guess.

Originally Posted by diffsoft

Your assessment is absolutely right - I / the MNC I worked for faced a similar situation. After about 10 years, they brought down prices (taking a loss at even an operating level) and then volumes zoomed - they brought back prices to reasonable levels successfully. Out here, economies of scale work even better so like you say it's even more important. Hyundai had a smart strategy of getting volumes with Santro leading them to set up a distribution network easily sometimes and get scale.

I wonder if Skoda can do that because that would mean VW will be smaller than Skoda - and would VW like it? Maybe not. If I were VW I would ask Skoda to aggressively localise and get Fabia sales to atleast City levels via better pricing.

Sorry if this is getting really offtopic, but love to talk on and on about this!!

Cheers,

Need really deep pockets for that but I guess it goes with the territory.

[naikpranav]

About the noise : The first time i TD'd the fabia Tdi, I was comparing with the swift diesel (my usual car), it felt quite noisy and underpowered, this was at 1600 km.
however, i cold started the enigine again after a few days when it had done 2200, this time it was much smoother than before, driving it like any other diesel car also made it feel much better.... the guy who sat with me was a driver for autobahn, and he said it keeps getting smoother, ofcourse, there was no noise and vibration in second gear, and even after the engine reached the operating temperature....

I would not like skoda's to be sold cheap, compromising on quality or safety, thats the reason why i have bought the car.

im still waiting for my car to be delivered, maybe another week (or two) nothing more....

[diffsoft]

Originally Posted by netchef

Iraghava: Sir, is it at all possible a player could enter a market and not aim for volumes? (To me 'volumes' can have a downside. If a Rolls manages to sell tens of thousands of its cars from current levels of a handfull, will it still hold its cachet- will it be a 'Rolls'?) Does 'economies of scale' apply even to a Bentley or a Mercedes Maybach in some way, even if it's 20 cars p.a.? Or is a firm like Skoda forced to slide it's target category: aiming high when they are forced to launch expensive cars, and dropping their sweet spot when they manage to drop prices? Will this impact brand perception and hurt their brand equity in the long run?

Sir, you have raised a fantastic question for which I cannot but have a point of view.

Q. Should a manufacturer aim for less volumes / high to maintain brand image?

A. In general, if that high price / low volume maximizes either profits or Returns on Capital, that's a valid point. There may ofcourse be really long term strategies like build an image and then really go for volumes. However Sir, in the case of Skoda that is not the case - they had an opportunity to leverage their image by going for volumes on the Fabia where the market size is bigger (for that segment of cars). They do not have a smaller car. We would agree that Fabia's image will not go down if they sell many more cars than they do now (with 702 cars and 54 dealers they sell about 13 cars a dealer every month - that may not even support the dealer to maintain a decent inventory of spares, high quality service managers etc).

Secondly Skoda's higher costs (assuming that they are on account of imports and not localization) do not "add value" to the buyer relative to competition. One can get like to like components made in India made at maybe much less costs (no customs duty, no exchange fluctuations, cheaper labor and no transportation costs) than the Skoda does today, and so the buyer is paying for all those costs that he could have done without.

Probably VW understands that and hence aggressive localization (my interpretation from press readings - just read that Polo will be available at 4.35 lakhs).

I know Sir that Fabia is a fantastic choice - my comments are more economic in nature.

Cheers,

[netchef]

Originally Posted by diffsoft

Sir, you have raised a fantastic question for which I cannot but have a point of view.

Q. Should a manufacturer aim for less volumes / high to maintain brand image?

A. In general, if that high price / low volume maximizes either profits or Returns on Capital, that's a valid point. There may ofcourse be really long term strategies like build an image and then really go for volumes. However Sir, in the case of Skoda that is not the case - they had an opportunity to leverage their image by going for volumes on the Fabia where the market size is bigger (for that segment of cars). They do not have a smaller car. We would agree that Fabia's image will not go down if they sell many more cars than they do now (with 702 cars and 54 dealers they sell about 13 cars a dealer every month - that may not even support the dealer to maintain a decent inventory of spares, high quality service managers etc).

Secondly Skoda's higher costs (assuming that they are on account of imports and not localization) do not "add value" to the buyer relative to competition. One can get like to like components made in India made at maybe much less costs (no customs duty, no exchange fluctuations, cheaper labor and no transportation costs) than the Skoda does today, and so the buyer is paying for all those costs that he could have done without.

Probably VW understands that and hence aggressive localization (my interpretation from press readings - just read that Polo will be available at 4.35 lakhs).

I know Sir that Fabia is a fantastic choice - my comments are more economic in nature.

Cheers,

Diffsoft: I hear you, Sir, and your argument is entirely valid. It does bring us back to the issue which is that due in part to the localization-from-inception strategy that VW is adopting in India, it will likely turn out that its products will end up cheaper than those of its cousin- Skoda. But VW is positioned/perceived at a higher rung in terms of brand in most if not all markets where both brands coexist, so isn't this going to do one or the other brand some damage, is my question.

I'm aware that it's a problem partly triggered by the fact that Skoda entered the market first, and hence was tied down to certain strategies opted for at the time (dependent on prevailing conditions, no doubt)- or rather that VW has the wider scope of possible strategy. The market has evolved and VW perhaps is faced with slightly varied circumstances. (Also, VW has some advantage as it can access facilities already set down by Skoda, thereby saving on time and costs, so it can in a way slingshot past Skoda.)

If Polo is sold for 4.35, it will work wonders for the VW baptism and its volumes, but won't Skoda suffer? Or, do the stakeholders of both companies figure a profit is a profit whichever brand it comes from? And just let the brands play tag or cat and mouse in the market at the whims of the market? I wonder.
It doesn't make sense to me, though.

I dont' know if Skoda would have 'leveraged' their image but they are certainly losing out on an opportunity of hitting exponential numbers in sales in a segment that would have afforded them such- had their pricing on the Fabia been more appropriate. Paradox of inch deep (profits), mile wide spread (numbers)...me thinks the traction it would have brought them would have augmented their competitive edge in the long term in a burgeoning market.

BTW: "...I cannot but have a point of view" I loved that

Take care.

[DirtyHarry]

Netchef Sir, keep me also posted if you blog anywhere else.

[netchef]

Originally Posted by DirtyHarry

Netchef Sir, keep me also posted if you blog anywhere else.

DirtyHarry: what a pleasure to see your bytes, Sir. You blog, I blog, we all blog...from Thursday (because the vaastu is right).
Shalom and things.

[netchef]

Any tips on how to rid the paint and windshields of tree sap? Can't say what tree it is (if it makes a difference), but it has little yellow flowers. It seems to bloom this time of year in Bangalore as they're dotted around the countryside.

[netchef]

I'd initially thought this Fabia would ring up the miles with great abandon simply because diesel is so much cheaper. Turned out I was wrong. It's nearly two months since she arrived in our family, and all she's managed to clock have been 800-odd kilometres.
However, we have enjoyed driving her that distance, unimpressive as it may be as distances go. So, it's still too early to give you guys a report on the FE...sorry.

Today, I let the Blade rest and wheeled out the steel grey Czech beauty. I wanted a bit of A/C comfort as the mercury climbs in Bangalore, and some radio to round off the experience, and I can say that the engine seems quieter than when we first got her. The characteristic diesel rattle is a little muted (to sound scientific, I'd estimate a 15% reduction) and she's also more subdued at driving speeds between 40 and 60kmph.
The last highway run we did with the family on saturday was a stately experience in quietitude. The Kolar road is not the best around but we preferred a change of scene, and the run to the Kamat motel for lunch was 'plain' The road isn't as well designed or surfaced as the Mysore highway, so it meant putting up with patchwork repairs to the macadam that unsettled the ride a bit; it also meant a slower pace since the road has more kinks than a Sheldon novel...yes, it not a modern road. It's the kind of road where you stop concentrating on your driving as there's only so much you can get out of it, and instead take in the countryside, categorize trees and do any of the other things the naturalist in you never gets to do.

The Fabia worked sublimely. It was a blasted hot day and the A/C was stretched with 4 adults and the sun beating down, especially in the front where the suns rays impinged directly thru the glass. Does Climate control work? I'd give it full marks. In terms of absolute comfort, it could have been better, but it might have got so that liquids were freezing over inside. 16 degrees was 16 degrees.

Dad has been experimenting with additives for the windscreen wash system and finally settled on Colin window wash liquid. So far so good. Still hasn't helped with the tree sap.
Any suggestions? The paint too is pock-marked with the love juices of our tabubeiaea or whatever tree that is, and it feels horrible.

the doors click
A springy stop at 3 stages means you cannot open the front doors to anything inbetween those steps. Bit of a bummer. There's a heap of rubble outside our house, and when the car is parked alongside, it's difficult to gauge if the door is going to clear the rubble without snicking an edge of paint, so one struggles a bit...pushing the door open with abandon is not recommended.

The Buttons in Front of the Gear Lever:
It's late. Yes, One locks the car, the other can be used to unlock (the trunk, for instance, if someone is getting off and needs to collect their luggage- while the rest of the Fabia-riders aim at carrying on...or getting carried away ).

Last but not least, Insurance Discounts
I had no idea but I was eligible for a No Claim Bonus discount. I also had no clue this discount could be transferred between cars and insurers! Sum it up? I got a refund of Rs 9136 from my new 'Fabia' insurer after submitting a NCB certificate from my previous Insurer. Lovely.

[iraghava]

Originally Posted by netchef

Dad has been experimenting with additives for the windscreen wash system and finally settled on Colin window wash liquid. So far so good. Still hasn't helped with the tree sap.
Any suggestions? The paint too is pock-marked with the love juices of our tabubeiaea or whatever tree that is, and it feels horrible.

Yes, there is a simple device to keep the Tree sap & Bird excreta off the car & it's windshield. It's called a Car cover.

[shankar.balan]

This is an extremely well written set of notes Monsieur Le Netchef.
I commend your writing style and sense of humour not to mention the attention to detail!

cheers

Originally Posted by netchef

I'd initially thought this Fabia would ring up the miles with great abandon simply because diesel is so much cheaper. Turned out I was wrong. It's nearly two months since she arrived in our family, and all she's managed to clock have been 800-odd kilometres.
However, we have enjoyed driving her that distance, unimpressive as it may be as distances go. So, it's still too early to give you guys a report on the FE...sorry.

Today, I let the Blade rest and wheeled out the steel grey Czech beauty. I wanted a bit of A/C comfort as the mercury climbs in Bangalore, and some radio to round off the experience, and I can say that the engine seems quieter than when we first got her. The characteristic diesel rattle is a little muted (to sound scientific, I'd estimate a 15% reduction) and she's also more subdued at driving speeds between 40 and 60kmph.
The last highway run we did with the family on saturday was a stately experience in quietitude. The Kolar road is not the best around but we preferred a change of scene, and the run to the Kamat motel for lunch was 'plain' The road isn't as well designed or surfaced as the Mysore highway, so it meant putting up with patchwork repairs to the macadam that unsettled the ride a bit; it also meant a slower pace since the road has more kinks than a Sheldon novel...yes, it not a modern road. It's the kind of road where you stop concentrating on your driving as there's only so much you can get out of it, and instead take in the countryside, categorize trees and do any of the other things the naturalist in you never gets to do.

The Fabia worked sublimely. It was a blasted hot day and the A/C was stretched with 4 adults and the sun beating down, especially in the front where the suns rays impinged directly thru the glass. Does Climate control work? I'd give it full marks. In terms of absolute comfort, it could have been better, but it might have got so that liquids were freezing over inside. 16 degrees was 16 degrees.

Dad has been experimenting with additives for the windscreen wash system and finally settled on Colin window wash liquid. So far so good. Still hasn't helped with the tree sap.
Any suggestions? The paint too is pock-marked with the love juices of our tabubeiaea or whatever tree that is, and it feels horrible.

the doors click
A springy stop at 3 stages means you cannot open the front doors to anything inbetween those steps. Bit of a bummer. There's a heap of rubble outside our house, and when the car is parked alongside, it's difficult to gauge if the door is going to clear the rubble without snicking an edge of paint, so one struggles a bit...pushing the door open with abandon is not recommended.

The Buttons in Front of the Gear Lever:
It's late. Yes, One locks the car, the other can be used to unlock (the trunk, for instance, if someone is getting off and needs to collect their luggage- while the rest of the Fabia-riders aim at carrying on...or getting carried away ).

Last but not least, Insurance Discounts
I had no idea but I was eligible for a No Claim Bonus discount. I also had no clue this discount could be transferred between cars and insurers! Sum it up? I got a refund of Rs 9136 from my new 'Fabia' insurer after submitting a NCB certificate from my previous Insurer. Lovely.

[netchef]

Originally Posted by iraghava

Yes, there is a simple device to keep the Tree sap & Bird excreta off the car & it's windshield. It's called a Car cover.

Touche, Sir (and I need something to keep that sarcasm off of me ).

Originally Posted by shankar.balan

This is an extremely well written set of notes Monsieur Le Netchef.
I commend your writing style and sense of humour not to mention the attention to detail!

cheers

Thank-you, Sir. Very kind of you.

[iraghava]

Originally Posted by netchef

Touche, Sir (and I need something to keep that sarcasm off of me ).

Oh, I didn't mean to be sarcastic!! Was just pulling your leg

P.S. Nice update, keep them coming!

[netchef]

Originally Posted by iraghava

Oh, I didn't mean to be sarcastic!! Was just pulling your leg

P.S. Nice update, keep them coming!

Was duly pulled, Sir .
Thanks. not much meat to the update and it's purely because we've not experienced her that much. Anyway, in our own little envelope, the car more than delivers. The folks are thrilled with her, and dad keeps saving the various articles he finds about the Fabia to show me- he's that proud of the car. In that light, the diminutive Czech nymph did what I hoped she would.

[nickatnite]

The Fabia is a tad overpriced for the Indian market , but it is a solid , well built car. The Indian made Swift hatch, on which it is loosely based, feels like cardboard on wheels, after a ride in the Skoda.

[netchef]

... feels like cardboard on wheels, after a ride in the Skoda.[/quote]
I agree she feels solid and well put-together.