Czech automaker Škoda Auto is prioritizing achieving profitable growth in the Indian market. The company is exploring the possibility of incorporating Compressed Natural Gas (CNG) into its model range, while also considering a limited return of diesel models such as the Superb, alongside preparations for the launch of a locally produced electric SUV (eSUV).
India ranks fourth globally for Škoda's customer sales, trailing Czechia, Germany, and the United Kingdom. Over the past year, the company has shown an 8 percent growth and plans to expand its retail network to over 200 points, focusing more on rural areas and Tier-II markets.
Martin Jan, a member of the Škoda Auto board of directors for sales and marketing, told Business Standard that the company's goal is to grow as much as possible in India, but this growth must be profitable, meaning 'growth without losses.' The company is also avoiding the temptation to increase volumes through aggressive price reductions in the highly competitive Indian market.
Jan emphasized that Škoda does not aim to gain market share by selling cars below their production cost; instead, it seeks a balance between demand, pricing, production capacity, and profitability. He noted that while selling cars at a lower price might increase sales volume, it would lead to losses, and the company is looking for a 'sweet spot' between volume and profit.
This approach is linked to Škoda's attempt to broaden its target audience in India. Traditionally perceived as a premium European brand, the company has begun offering more affordable models, such as the Kylaq, which, according to Jan, has helped expand the dealer network and attract buyers to larger Kushaq models.
Nevertheless, smaller cars also generate less profit because, by thumb rule, larger vehicles yield better returns. Thus, intense price competition in India remains a key factor that Škoda considers when expanding beyond its traditional customer base.