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Skoda India pauses launches, to focus on after-sales

Skoda will now concentrate on customer experience, cost-cutting to boost profitability, says Skoda India Chairman & Managing Director.

business Updated: Jun 09, 2015 01:19 IST
Nachiket Kelkar
Nachiket Kelkar
Hindustan Times

Despite being in India for around 14 years, Czech carmaker Skoda still doesn’t have a huge market share in the country. But while the competition is lining up a slew of cars, Skoda has decided to focus on after-sales services and cutting costs.

“We are very realistic that there is no point in putting new products on the road if the customer experience with those is going to deteriorate after six months,” said Sudhir Rao, chairman and managing director of Skoda Auto India.

This comes at a time when Skoda’s sales figures in May stood at 1,300 units compared to market leader Maruti Suzuki’s over 100,000. Meanwhile, its closest competitor Volkswagen, which owns Skoda, sold 4,167 units.

“We are very clear on our product strategy. We are very focused on improving customer satisfaction and after-sales experience,” said Rao.

The company is focusing on addressing the “customer satisfaction issue” and has deployed data miners to spot weaknesses in the company’s strategy.

The last launch that Skoda had was the face-lifted version of the Rapid in September 2014. The company had rolled out facelifts of the Superb and Yeti earlier.

“Starting now, we will probably increase our sales month-on-month. May was the first month when we increased retail sales over last year. We have less than one month stock at the dealers. Last month we ended with 950 cars at the dealers. This will have subsequent benefits of cash flows, interest costs etc,” he said.

The company wants to forge a solid foundation by tuning its vehicles to the local market. This idea resulted in the carmaker pulling the plug on its hatchback Fabia in 2013. “We realised that we need to first learn how to make cars profitably in that segment,” Rao said. “We have reduced outlays and engineering expenses by about 20-30%. That learning we will now expand to other segments. We will come back in to the Fabia segment at some point.”

First Published: Jun 09, 2015 01:10 IST