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Skoda banks on traditional passenger cars

Number one: The Octavia medium passenger car is Skoda’s best seller globally and in Australia.

SUVs a focus but Skoda says it will always offer sedans, wagons, hatches

21 Nov 2018

SKODA board member for sales and marketing Alain Favey says the car-maker is committed to the long-term future of traditional passenger cars, despite the rapid increase of SUV sales globally.
The Czech brand has only recently started its global SUV assault, with the Kodiaq large seven-seater landing in Australia mid-last year, ahead of the one-size smaller Karoq in June this year.
A yet-to-be-named small SUV based on the Vision X concept from this year’s Geneva motor show will arrive in the second half of 2020 to replace the Yeti that was discontinued last year.
Mr Favey said there was still opportunity for models such as the Octavia mid-size liftback and wagon globally, and pointed to the imminent launch of the Scala small hatchback as proof of health in the passenger-car sector.
“For us there is no doubt that in the future there will be a demand for cars like the Octavia, irrespective of what’s happening with SUVs or electric vehicles,” he said at a media event in Sydney this week. 
“We definitely have no shadow of a doubt that we need to develop the future generation of the Octavia. Just as we need to introduce the Scala, a real contender in this hatchback market.”
Mr Favey said it was “not necessarily” likely that the market would shift to 100 per cent SUV sales and highlighted the plateauing sales of crossovers in the world’s biggest car market, China.
“The Chinese market is actually where the trend to SUVs has been overwhelming in the last few years. As you have in Australia, this trend where 40 per cent of the market is SUVs. 
“And funnily enough when everyone was expecting a continuation of this trend, this year actually this trend has stopped. And the Chinese SUV market is no longer growing. And, actually there is a revival of demand in China right now for notchbacks – sedans.
“Is this SUV trend going to continue? Will there be a point when the Australian market will be 100 per cent SUVs? You might have a better answer about Australia. As far as I am concerned, I don’t believe SUVs will overwhelm the market. There will always be demand for other types of cars.”
Mr Favey said Skoda occupied a strong position when it comes to passenger-car sales in Australia, specifically with its wagon line-up.
“In the segment of Octavia (sub-$60,000 medium segment), we have reached more than 20 per cent share in this wagon market. The wagon market might be under pressure worldwide, but we do think that in this market especially there is still demand, some people still want these types of cars.”
He added that with fewer brands offering wagons, it provided an opportunity for Skoda.
“Even if the market is getting smaller, there might have less offers so we can get a bigger part of the cake.”
Given its SUV line-up has only increased in the past 18 months, Skoda’s Australian sales are still heavily skewed to passenger cars.
Of the 5031 overall Skoda sales to the end of October this year, 3460, or 69 per cent are for passenger cars, with the remaining 1571 and 31 per cent going to SUVs.
The Octavia remains Skoda best-selling model both in Australia and globally.
Asked how many SUVs Skoda could have in its Australian line-up in the future, Mr Favey said the future compact SUV, the Karoq, Kodiaq and the future electric SUV were an appropriate number.
“We will have three internal combustion engine and one electric (SUVs). The other specific things that we are doing for the Chinese market, the Indian market … these are not cars that are suitable for the Australian market. 
“As far as Australia is concerned, three internal combustion and one EV would be very good coverage.”
Meanwhile, the company says it will still offer diesel-powered models, and while some variants that have been dropped due to Worldwide harmonised Light-vehicle Test Procedure (WLTP) homologation in Europe will return, others might not.
While the 140TDI Kodiaq is expected to return to production early next year, Skoda Australia planning and product manager Kieran Merrigan said the 140TDI Superb was “a bit of an unknown at this stage”. 
“The volume wasn’t huge for Superb (diesel). So in terms of limiting complexity in the segment that Superb is in, probably not, but to be discussed once it becomes available again.”
The Karoq will also be made available with a turbo-diesel engine and Sportline trim next year.

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