Skoda Auto India is banking on its localisation strategy to shed the perception of high maintenance costs among buyers.

With its India 2.0 strategy, the Volkswagen subsidiary has achieved levels of localisation that have made its product not just price-competitive but also easy to maintain.

“There is a commonperception that Skoda is aEuropean brand and expensive to maintain. But thisis not true. We were able to make an Indian product developed for India, and deep localise it,” Petr Janeba, brand director, Skoda Auto India, said at the unveiling of itsfirst compact SUV, the Kylaq, last week.

“We were able to find local suppliers and not bring parts from Europe. That allowed us to make competitive pricing for these cars and we could secure parts very quickly at very cheap prices.

“Since the India 2.0 range, our cost of ownership went down but people don’t know that,” Janeba said.

Skoda, which entered the Indian market in 2001, was known as a premium brand selling sedans such as the Octavia and the Superb.

“These cars were expensive because they had parts from Europe,” said Janeba.

Skoda has launched the Kylaq at an introductory price of ₹7.89 lakh

“It’s an introductory price. We will announce the entire price range with all the trims and variants and the colour options on December 2. We will start to produce the car in December,” said Janeba.

“We have brought a higher segment product lower down and set pricing which is 100 per cent competitive. Now we have to bring the car to the customer,” he said.

The company, aiming to sell 100,000 units of Kylaq in a year, has increased its production capacity. “We officially have a capacity of 250,000 units but with overtime, we can do 270,000 units,” said Janeba.

Making an entry into a segment that is already overcrowded, Skoda India aims to have a 7 to 10 per cent segment share.“It can seem like we are late, but it has its pros and cons. You can predict what customer wants, the competition is already there and you know what they are offering.”