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Skoda knocked by VW diesel scandal

Riding high: Skoda is set to get an SUV boost in the coming years with an all-new Yeti and a production version of the seven-seat VisionS concept (left) that was revealed at the Geneva motor show.

SUVs and better supply to push Skoda higher in the wake of VW Group diesel scandal

17 Mar 2016

SKODA had been “knocked” by the Volkswagen Group diesel emissions scandal that caused the abrupt withdrawal of a key variant of its Yeti SUV from the Australian market, inflicting some sales pain.

Skoda Australia director Michael Irmer said the cancellation of the Yeti diesel variants, combined with the sell-out of the now replaced Superb, meant the brand was trading “with only three and a half models”.

The Yeti TDI was pulled from the market in October 2015. Skoda was selling about 73 units a month for the year until October, the majority being the affected diesel variant.

In the three months until the end of the calendar year, it sold only 127 Yetis, averaging 42 a month. Yeti was the only ongoing Skoda with the affected EA189 2.0-litre engine after the superseded diesel Superb had finished its run in Australia.

Yet, despite the emissions problem and a lower than expected contribution from the Rapid liftback which found 448 homes in 2015, Mr Irmer described Skoda’s 2015 sales results as “pleasing”.

“Yes, the emission issue did affect us but not as much as our parent,” he said.

Despite Skoda's inability to meet demand for some models in 2015 – particularly the top-selling Octavia RS – and then losing the Yeti diesel, the Czech manufacturer's Australian sales lifted in 2015 by 23.3 per cent compared with 2014 and Mr Irmer said he remains optimistic about 2016.

“We had that increase basically on our passenger cars which was quite remarkable given the Australian market is more about SUVs,” said Mr Irmer of the company’s 2015 result.

“I am very happy that we have done so well in a market with virtually just our passenger cars, given the passenger-car market is falling and the SUV market is rising.

“It was also our first full year of Octavia after the supply restrictions – mainly the RS but global demand tightened all production – were ended. But then we had to stop the diesel Yeti which also affected sales.”

It wasn’t the only hiccup in 2015, with Mr Irmer indicating that the Rapid – the company’s slow-selling small-car – became neglected as buyers demanded more upmarket products.

“It’s towards the end of its life-cycle at the moment,” he said of the Rapid.

“We are concentrating more on the prestige end of the market.”

Mr Irmer is pushing hard to get SUVs into the Australian market.

“It’s what we need,” he said. “We hope to have a seven-seat SUV in Australia by the second half of 2017 and then the Yeti replacement, which is bigger than the current model, in 2018.”

The seven-seat SUV will be based on the VisionS concept that was unveiled at the recent Geneva motor show.

While Skoda last year repaired some of the problems with demand by boosting production at its Czech plant, there is some concern the same issues may reappear.

Mr Irmer said the order bank for the new third-generation Superb – launched in Australia this week – was already at 30,000 vehicles. That alone augers well for the car that Skoda wants to push into the prestige segment.

“This is from our European customers and at the moment represents about six months of demand,” he said.

Mr Irmer said even though there was strong interest in the Superb before its Australian showroom debut, he was confident Australia has sufficient stock to meet demand.

“We have been very aware of the potential for the car and have introduced ideas such as option packs,” he said.

Skoda’s option packs on the Superb start at $1500 and rise to the comprehensive Tech Pack – that includes an advanced safety inventory – at $3400 above the car price. “This will reduce the need for buyers to select individual items to customise their car and therefore potentially delaying delivery.”

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