Entry Of Skoda Auto In India Commerce Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Skoda Auto, most commonly known as Skoda, is an automobile manufacturing company based in the Czech Republic. Skoda became a wholly owned subsidiary of the Volkswagen Group in 2000, positioned as the entry brand to the group . Its total sales reached 684,226 cars in 2009.

It soon formed a stable position in the developing international automobile market, so that the Company could soon start operating on a wide scale. The volume of the production increased and soon exceeded the potential of a private enterprise, and in 1907 the founders of the Company initiated conversion to a joint-stock company. The international character of Skoda's operations became increasingly important.

The Czechoslovak economy managed to maintain a relatively good standard in the post/socialist period for several decades, in spite of the changes brought about by planned economy and efforts at unduly rapid growth. This standard only became questionable towards the end of the nineteen sixties due to development of new technology in the western world.

After the political changes of 1989, under the new market economy conditions the Government of the Czechoslovak Republic and the management of Skoda began to search for a strong foreign partner whose experience and investments would be capable of securing long-range international competitiveness of the company. In December 1990, the Government decided on cooperation with the German Volkswagen Group. The Skoda - Volkswagen joint venture began to operate on 16 April 1991 under the name Skoda Automobiles, becoming the fourth brand of the Volkswagen Group alongside VW, AUDI a SEAT.

Å koda Auto India Private Limited

Å koda Auto India Private Limited, more commonly referred to as Å koda Auto India, established November 2001,[1] is a fully owned subsidiary of the Czech automotive manufacturer Å koda Auto,[2]

According to an official release, Å koda Auto India sold more than 16,000 units in 2008,[2] a 28.5% increase from 2007 sales totals.[2] Furthermore, SAIPL is aiming to become the strategic hub in South and Eastern Asian markets for the Å koda Auto marque, by exporting its locally produced products to Nepal, Sri Lanka and Thailand.[3] As of April 2009, it has sold over 61,000 units since operations began in November 2001.[1]


The Octavia was the first car to be launched in India.[3] Targeted at the Indian premium segment,[3] its handling, fuel efficiency, and low initial price (compared to other products then available in the Indian market)[3] made the Octavia an instant hit with the Indian car user.[4] Its Turbocharged Direct Injection (TDI) diesel engined version, in particular, delivered a high level of fuel efficiency and (for the Indian market)[citation needed] power and torque, resulting in higher level of driveability when compared to existing products available in the Indian market.

[edit]Manufacturing facilities

Initially, Å koda Auto India used just one plant to manufacture its cars, the Aurangabad plant, located in Shendra,[5] nearAurangabad,[3] in the state of Maharashtra. All vehicles produced are from semi-knock down (SKD) kits.[3]

In May 2009, Å koda Auto India will begin operations at a Volkswagen Passenger Cars-owned Pune plant in Chakan.[5][6]The plant will be shared: Å koda Auto India will use the plant to assemble the Fabia,[4][5][6] whereas Volkswagen India will use the plant to assemble the Polo,[4][5] beginning in 2010.[6] The plant has a capacity of 110,000 cars per year.[6]


Å koda Auto India currently sells the following four fundamental models, in a total of nineteen variants:[7]

[edit]Manufactured Locally

Å koda Laura (Launched 2005)[5]

Å koda Fabia (Launched 2008)[2][5]


Å koda Superb (Launched 2004)[1][5]

Å koda Yeti (Launched 2010)


Å koda Octavia (Launched 2001, discontinued 2010)[5]

The Octavia was the first to be launched in India, in the year 2001.[3] It saw a unique pricing strategy - both petrol- and diesel engine variants carried the same price tag.[citation needed] This was contrary to usual market strategy wherein diesel engined vehicles were almost always at a premium.[citation needed]

The Fabia was launched in 2008. Tagged the super hatch,[2][5] and targeted at the premium hatch segment,[8] the 1.2 and 1.4 petrol variants of the vehicle were recalled,[9] citing "inconsistent fuel quality" in India that was found to have caused fuel efficiency and performance problems,[9] including, according to some reports difficulty, depressing the brake pedal whilst travelling at high speed.[9]

[edit]Sales and Service Network

Å koda Auto India Private Limited currently has 66 dealerships across 50 cities in 18 states and 2 Union Territories of India.[10]


While Å koda cars in India have been praised for their quality, performance, comfort, efficiency, technological innovation and driving experience,[11] they have been reported to be expensive to own and maintain.[citation needed]

In February 2008, Nummer Eins, a Å koda India authorised dealership, swapped parts from a car that was scheduled for service and replaced them with non-standard and defective ones leading to an accident.[12] The consumer Court in India ruled that Å koda Auto must pay for the repairs on the car, which must also be carried out to international standards.[12] In a separate case, the Indian consumer Court had directed Å koda Auto to replace a defective car with a new one, or refund the owner INR1,113,000,[13] after Å koda Auto failed to rectify a major problem in a car.[13] M/S Silver Tone Motors Pvt Ltd, a Å koda service centre, claimed that the problems were caused by non-genuine parts that were installed by the owner

History of skoda India-

Å koda's association with India began with the advent of the new millennium on November 16, 2001 when Å kodaAuto invested in a plant in Shendra, making it the company's only manufacturing facility outside Europe. This plant is spread across 300,000 square meters and the facility is regarded as one of the best engine assembly plants in Asia with a production capacity of 40,000 units per year.

Å kodaAuto - a brand which is known for its lifestyle value, offering reliability and European build quality with a constant endeavor to introduce modern technologies, has successfully launched four product lines which include the flagship model the Å kodaSuperb along with the Å kodaLaura, the Å kodaOctavia and the Å kodaFabia with 19 variants in India. It has been instrumental in bringing in latest technologies like the turbo petrol engine, Pumpe Duse TDI and DSG Automatic gearbox.

Å kodaAuto India is confident of the support that its customers have shown towards its products. To cope with the growing demand, it is already on an expansion drive. Å kodaIndia today boasts a wide product range, extensive sales and a support network of 54 dealerships across the country. Å kodaAuto India has chalked out aggressive plans and is set to double its sales in 2008.

The beginning of Å kodaAuto India in 2008 has been very successful with the launch of Å kodaFabia at the January, 2008 Auto Expo, New Delhi along with the achievement of 'TNS Voice of the Customer Awards for Skoda Octavia in Premium Mid Size car segment.

In 2006 and 2007, Å kodaIndia has received a spate of awards which has been remarkable in terms of achievements like J D POWER ASIA PACIFIC AWARDS FOR 2007 for being ranked 1st in Sales satisfaction index 2007. Å kodaIndia also achieved the 'TCS award' in mid size premium segment against Honda Civic in 2006 along with 'Most Technologically Advanced Car' for Å kodaLaura; 'Best Variant' for Å kodaSuperb Turbo Diesel from CNBC-TV18 AUTOCAR AUTO AWARDS 2006; 'Executive Car of the Year' from NDTV PROFIT CAR INDIA AWARDS 2006, and 'Auto tech of the Year' from OVERDRIVE 2006, both awards for Å kodaLaura. The other awards received in the past include 'NFO Voice of customer' award in 2003 and the BBC Wheels award in 2002 for the 'Best entry luxury car'.