Skoda to launch small car at Rs 3-5 lakh

Czech car-maker Skoda on Tuesday said it will introduce a small car in the Indian market in early 2012, which will be priced at Rs 3-5 lakh (Rs 300,000-500,000).

The company, a part of the Volkswagen Group, will also introduce its sports utility vehicle, Yeti, and a stripped-down version of its premium hatchback, Fabia, in India by the end of this year.

In addition, it will launch a sedan with a Rs 6-10 lakh (Rs 600,000-1 million) price tag in 2011.

"We had announced to roll out one new model every year. As part of this strategy, we will enter the volume segment and will launch a small car in early 2012," SkodaAuto India board member and director (sales and marketing) Thomas Kuehl said.

The development of the car is underway and the company will launch the model in both petrol and diesel versions.

When asked about the possible price range of the vehicle, he said: "It will be below the Fabia... Our aim is to price in the Rs 3-5 lakh category."

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The over 15 lakh (Rs 1.5 million) units strong Indian passenger car market witnesses most of its sales coming from the small car segment and global car majors have launched a slew of new models in the Rs 3-5 lakh bracket in recent months, including Ford's Figo, General Motors' Beat and Volkswagen's Polo.

Kuehl, however, declined to comment on whether a new facility will be set up to produce the car or it will be rolled out from the existing Aurangabad unit, which has a capacity of 44,000 units per annum.

"We have not decided anything about production. We are open to sharing technologies as well as the plant of our parent Volkswagen," he added.

German car major Volkswagen (VW) has invested 580 million euro to set up a manufacturing facility in Chakan with an annual production capacity of 1.1 lakh (110,000) units.

Kuehl said the company is expecting to treble its sales in the next three years, mainly on the back of the proposed small car.

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The company sold about 14,800 units last year and is aiming to cross the 20,000 units mark in 2010.

Asked if the car will be exported to other nations, Kuehl said, "We never ruled out export... We study that option, but nothing has been decided now."

In addition, SkodaAuto India has geared up to launch the Yeti in the country within the next few months.

"We will launch the vehicle as a completely knocked-down unit from our plant. The price has not been fixed, but it will be competitive," Kuehl said.

Skoda had unveiled the SUV at the Geneva Motor Show last year and it was introduced in the European markets with both petrol and diesel engines.

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On plans for a low-cost version of the Fabia, Kuehl said: "We will launch a refurbished Fabia in both petrol and diesel options during the last quarter of this year. It will be more competitive than the existing one."

The company currently sells a diesel variant of the Fabia for Rs 600,000-784,000 (ex-showroom, Delhi). It had phased out the petrol option of the Fabia due to non-compatibility with Bharat Stage-IV emission norms.

Kuehl said the company will also introduce an entry level sedan in the country next year.

"We have phased out Octavia due to stricter emission norms," he said, adding that it will be replaced by the new entry level sedan, which will come with a price tag of Rs 6-10 lakh.

The company will produce the car at VW's Chakan unit and it will share technologies with the parent's latest sedan, Vento, he added.