Industry
Skoda's new proposition to crack the Indian mass market: value-for-money cars
Summary
- Starting 2026, the company hopes to sell 100,000 cars a year, driven mostly by the Kylaq, which will take on 18 other models in the sub-four-meter segment, Martin Jahn, member of the Skoda board of directors for sales and marketing, said.
‘Paisa Vasool’ isn't a phrase that rolls off the tongues of senior leaders of Czech premium carmaker Skoda Auto often. But at the launch of its first, made-for-India compact sports utility vehicle Kylaq, value for money and ‘paisa vasool’ were key phrases to emphasize how serious the brand was to crack the Indian mass market and shed the perception its cars were too pricey for the value-conscious buyer.
Starting 2026, the company hopes to sell 100,000 cars a year, driven mostly by the Kylaq, which will take on 18 other models in the sub-four-meter segment, Martin Jahn, member of the Skoda board of directors for sales and marketing, told Mint in an interview on Wednesday.
The Kylaq compact SUV was launched at a starting ex-showroom price of ₹7.89 lakh.
Skoda Auto is adopting a multi-pronged gameplan for India, focusing on local manufacturing, cost management, and expanding its model lineup to tap into the country’s largest and most competitive passenger vehicle segment. After the completion of the India 2.0 program, in which the Skoda Auto Volkswagen India launched four new products, the Kylaq is the group's bid to make a fresh push to become a meaningful European player in the domestic market, which is increasingly important for global brands amid tough Chinese competition in the international markets.
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Jahn said that the company will continue ramping up its domestic manufacturing in pursuit of sustained profitability.
With ambitions to sell 100,000 units in the mid-term, Skoda sees its success tied to balancing premium features with competitive pricing. “We are bringing a very good package of European technology, modern design, and high safety for a very good price," he said.
Last year, Skoda achieved a significant milestone by breaking even in India—a market it has operated in for more than two decades but struggled to turn a profit. The company's foray into India's largest segment, populated by established players and dominated by price-sensitive consumers, presented a steep challenge. However, Jahn noted that staying competitive in the price-sensitive segment was necessary if Skoda wanted to play a significant role in the Indian market. "We don’t want to lose money on any product," Jahn stated. “The product has to be profitable. The question is, how profitable it will be, but we have no intention of losing money with any product."
To achieve long-term profitability, Skoda is focusing on increasing its level of local manufacturing. “Further localization is key to our profitability in India," Jahn explained.
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The automaker is also looking to build stronger ties with Indian suppliers to enhance cost efficiency and secure competitive pricing. “Our purchasing department is very active, and we want to make sure that we do not compromise on quality," said Jahn, who stressed that localization is not about merely cutting costs but ensuring component quality that meets Skoda's standards. The company has already expanded its local supplier base by 10%, underscoring its long-term commitment to embedding itself deeper within the Indian market.
Though Skoda’s primary focus remains on India, the company is also evaluating opportunities to export select models, including the Kushaq and Slavia, as parts and components, to markets such as Vietnam. However, the export of the sub-four-meter model remains uncertain due to specific regulations that make its appeal more India-centric.
The broader Indian market outlook, however, presents its own set of uncertainties. The launch also comes amid a muted Indian passenger vehicle market this fiscal year so far, despite the recent festive cheer in October.
“Next year is a big question mark… There is no clear view on this," Jahn said. Despite this, he expressed optimism that Skoda’s market share could grow, fuelled by new model launches and increased production capacity. The company plans to increase its retail outlets to up to 350 in India, from 260 currently, allowing it to serve more customers and broaden its reach across key regions.
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As Skoda navigates this landscape, the company is determined to leverage its unique value as a European brand in India’s crowded automotive space. “We are the only European brand in this segment," Jahn said.
