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Skoda Australia rejects ‘budget brand’ calls

Top spec: According to Skoda, more than 50 per cent of Octavia volume is for the range-topping RS, with a skew towards the wagon variant.

Rich model mixes point to Skoda Australia buyers spending big

Skoda logo14 Dec 2017

SKODA Australia director Michael Irmer has rejected persistent suggestions that the Czech car-maker is the ‘budget brand’ of the Volkswagen Group, pointing to figures that reveal high take-up of flagship variants and research that shows most buyers earn a higher-than-average income.

Mr Irmer admitted that a trend towards buying the top variant was rare globally, but insisted that Australians had a different perception of the Skoda brand compared with other markets.

Being called a budget brand “is kind of not true for Australia at this point in time” he explained to GoAuto at the national media launch of the Octavia RS245 on the New South Wales Central Coast last week.

“That might evolve over the years, but at the moment it (the buyer profile) is probably people who want to be different. People who want the same as you get in a Volkswagen or in some of the lower versions of luxury brands or other German brands. But it’s sensible.

“Then you quite quickly figure it’s actually phenomenal value that you really struggle to find elsewhere in the market.”

Value as a distinction from low price has driven Skoda growth, according to Mr Irmer, who added that a typical buyer was university educated, had a skilled career and could afford premium vehicles.

“It (the buying decision) is not for budget reasons,” he insisted.

“We see a very high level of people with university degrees. The level of university degrees is the second-highest of any brand in Australia. That hasn’t to do with Skoda having a luxury buyer. It has to do with the early adopters having options for this area.

“You see this in the extreme high (model) mixes. We have the same in Superb. We have the same in Kodiaq. All those cars are basically literally selling only the top of the range. This is not like this in other markets.”

According to Skoda, the RS makes up more than 50 per cent of Octavia volume, and the single most popular variant is the more expensive RS wagon with optional automatic DSG and at least one further option package.

Similarly, the flagship 206TSI has snared 40 per cent of Superb sales, 60 per cent of which are wagons, and “almost all” of which are fully optioned. Even 80 per cent of single specification – until the arrival of the diesel 140TDI this month – Kodiaq 132TSI sales have been fully optioned examples.

“Why is that?” Mr Irmer pondered.

“These are people which are conscious of decision making. He could well afford a BMW. He could well afford a Mercedes-Benz. He chooses to not do that, and he might have his own reasons. Every individual might have different reasons but a quite likely chance of reason is he doesn’t want to be seen as pretentious.

“He doesn’t want to be seen as a certain demographic. He just likes to fly a little bit under the radar. He still wants to have all the perks of a car and all these goodies and all that. I think it’s safe to say and they (buyers) also like to be being a bit different.”

Mr Irmer said that while it was important for Skoda to distinguish itself from Volkswagen in terms of price, equipment and character, a 90 per cent conquest rate from other brands showed that it did not have to be a sole focus.

“Ninety per cent of our buyers are switching from other brands to Skoda, 90 per cent every single month we conquest other brands,” he continued.

“That is not normal, because normally you have 60 per cent conquest and about 40 per cent repeat. We only have 10 per cent. That has to do that we don’t have an existing car parc which is ready to flip their cars yet. We just don’t have it yet.

“So then of course, it shows what a great achievement 5000 (annual sales in 2017) is. It might, from a distance, not look that much, but consider that out of 500 (sales) we do in a month 450 would come from other brands, from a whole heap of different brands.”

Asked to nominate the brand buyers are most likely to switch into a Skoda from, Mr Irmer replied “there is not a particular brand to be called out.”“(Buyers) of Japanese brands are more likely to switch to Skoda, but there are some European brands as well. Renault, Peugeot, some of those luxury brands.

Especially in Superb we see a bit of luxury buyers coming switching to Superb as well.

“But in the Asian space, it’s mainly Hyundai, Mazda, Subaru.”

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