Skoda to Focus on India to Drive Growth, Avoid Over-Reliance on Europe: Skoda Auto CEO

Czech automaker Skoda Auto is gearing up to ride the 'growth train' in India, developing the country as a 'second pillar' to stand to avoid over-reliance on Europe in future, according to its CEO Klauss Zellmer.

The company, which is driving the Volkswagen Group's business in India, is preparing for a "big game" in the battery electric vehicles segment in the country by fully localising the 'CMP21' platform that has been engineered and developed in China, besides looking to bring another small EV, Zellmer told PTI here.

"Skoda, we're very strong in Europe. We're now number three in Europe. Our growth path is humbly impressive... We're making good money. We're a very profitable company. We're one of the most profitable volume car manufacturers in the world, but we depend very much on Europe, and to depend just on one region is not a good idea," he said when asked about the plans for the next phase of growth in India.

Pointing out how other car companies have "found that out the hard way" with over dependence on China and the US, Zellmer said, "So we want to develop a second pillar or second leg that we stand on, and the second leg, clearly, is India. That is why we are so serious about it, and that is why we have those plans to localise a whole platform." Going forward, he said the CMP21 platform could also be a multi-traction platform, and not just battery electric vehicles.

When asked about reports of the VW Group planning to invest a further 1 billion euros in India, he said, "This has never been communicated or confirmed by us, and we wouldn't." Zellmer, however, said, "I can clarify and confirm that we are very serious about getting on that growth train, or growth possibility of India as a brand and as a group, because we had the strategic direction for the whole group in India." Asked if the VW Group planned to bring products from the 'electric urban car family', especially the Skoda Epic, which has been showcased at the IAA Mobility here, Zellmer replied in the negative.

"With India, we actually have a different plan than bringing over the cars that we sell here in Europe, like the Epic... we currently do not have a plan to bring it to India. We want to have a car that is made for India, and then (made) in India." While Skoda did bring "a couple of Enyaq" electric SUV to test the waters in India and that "was actually pretty successful", he said, "But the big game in terms of battery electric vehicles will start once we have localised our platform, CMP21".

It is a platform that has been engineered and developed in China, he said, adding "but we want to fully localise that in India." Zellmer further said, "We are going to bring it over as a technology, but we're going to localise and source everything for the platform in India for India." This is the plan. The group is also "working on, potentially bringing over another small battery electric vehicle" in India in order to meet CO2 emission compliance, he said, however, declining to share details, saying "nothing we can go deeper at this point in time".

Expressing satisfaction with the overall performance of the VW Group and Skoda in particular in India under its India 2.0 project, Zellmer said, "With the current portfolio that we have from VW, and for Skoda, especially Skoda, with the Kylaq (compact SUV), we're reasonably happy. We have doubled our sales this year compared to last year. The Kylaq is a good story, a success story, so we'll take it from there.

Under its India 2.0 Project announced in 2018, VW Group had announced an investment of 1 billion euros between 2019 and 2021, with Skoda Auto leading the drive for growth.

SKODA AUTO Volkswagen India manages the Indian operations of five Volkswagen Group four-wheeler brands --“ Skoda, Volkswagen, Audi, Porsche and Lamborghini.

On the recent GST rate cuts, Zellmer appreciated the government's move and said, "This is really a great initiative that will help boost the car industry and car sales that are currently stagnating rather than soaring." He further said, "I think it is the right decision. It drives consumers towards the lower end of segments, which is totally okay because with Skoda and VW, this is where we have a lot on offer." It is not benefiting individual manufacturers, but it is benefiting the whole industry, Zellmer said, while noting that there will be intense competition in the market going ahead.