With concerns about a worldwide recession hitting demand in Europe, the UK, and the US and a rise in COVID-19 cases depressing consumer confidence in China, premium and luxury carmakers with European roots, including Skoda, Mercedes-Benz, and BMW, are stepping up their efforts in India. Carmakers are prioritizing funding for India due to its comparatively strong growth trajectory.
With approximately 54,000 vehicles sold in India in 2022, the Czech automaker Skoda, which is a division of Skoda Auto Volkswagen India, has more than doubled its sales there. Its success is a result of aggressive network expansion efforts, lowering the cost of ownership, the popularity of its India 2.0 products, and other factors.
The luxury segment only makes up 1% of the domestic car market in terms of volume. Nonetheless, India outperforms other emerging economies because of its burgeoning affluent consumer base, which includes young people. Leadership groups in Europe have been spurred by this to enhance funding for the nation.
Skoda Intends to Assemble Indian CKD Vehicles in Vietnam
Skoda’s vehicle deliveries in India more than doubled last year, highlighting the company’s ability in growing its global presence. Skoda intends to sell 30,000 cars annually in order to increase its market share in Vietnam. In order to start local assembly, imports from Europe and then India is included. Using its proximity to India, the business will assemble CKD (Completely Knocked Down) cars at the Skoda Auto manufacturing facility in Pune, India. The production line owned by Thanh Cong Motor Vietnam, which will be finished in H1 2024, will be used for CKD operations. The Kushaq and Slavia will be among the Indian CKD-built vehicles.
Skoda’s Success in India Prepares the Asia-Pacific Area for Sustained Development
Skoda currently enters Vietnam as part of its Next Level – Skoda Strategy 2030, which focuses on enhancing its global presence. The corporation wants to increase its market share outside of Southeast Asia. And we’ll start with the crucial Vietnamese market from a strategic perspective. Skoda is anticipated to consider expansion in additional ASEAN markets in the future.
Skoda has fought its way back to gain a larger footing than in past years in India, a crucial market. This makes it possible for the manufacturer to gain from cross-regional synergy. driving sustainable growth throughout the Asia-Pacific region in the long run.
Skoda believes that Vietnam, the Middle East, and other ASEAN markets have growth potential.
The EU-Vietnam Free Trade Agreement will cut regulatory burdens and most tariffs, allowing for a swift growth to more than 50 dealers. This arrangement will make it easier for Skoda to reach its target of 40,000 deliveries by 2030. In addition to Vietnam, Skoda believes that the Middle East has significant potential.
This is a tactical step that will allow the business to broaden its consumer base and reach new geographic markets. Skoda is actively diversifying its revenue streams and decreasing its reliance on any one market by increasing its global footprint.
The company’s long-term goal and commitment to sustainable growth are both supported by this approach. Skoda’s focus on worldwide expansion will position the company for success as the automotive market continues to change.