The company has charted an ambitious roadmap in an intensely fought compact SUV space with over a dozen rival offerings. With a heavily localised sub-4 meter SUV and a differentiated go-to-market strategy, the company is hoping to break into the mainstream.
25 Jan 2025 | 6059 Views | By Ketan Thakkar
With an eye on breaking into the mainstream, Skoda Auto India is banking on its most affordable compact SUV, the Kylaq, to participate in the growing segment.
The company has set itself a steep target of garnering an 8% segment share in this market dominated by formidable brands like ...
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With an eye on breaking into the mainstream, Skoda Auto India is banking on its most affordable compact SUV, the Kylaq, to participate in the growing segment.
The company has set itself a steep target of garnering an 8% segment share in this market dominated by formidable brands like Tata Nexon, Maruti Suzuki Brezza, Hyundai Venue, and Kia Sonet, amongst others. If it attains its stated target, this may translate to annual sales of approximately 75,000–85,000 units.
This may significantly leap into Skoda’s efforts to move from a premium niche player to a mainstream volume brand.
Commenting on the model's importance, Petr Janeba, Brand Director of Skoda Auto India, stated, “The Kylaq is a breakthrough for Skoda in India. It allows us to enter the largest and most competitive segment in the market with a product that delivers exceptional value. We are targeting an 8% market share in this segment, which is realistic and achievable.”
This will also double its overall market share, with a target of 2.5%–3% of the passenger vehicle market by 2025. Janeba remarked, “Our goal is to make Skoda a household name in India, not just in urban centers but also in smaller cities and towns. This is the next phase of our journey to becoming a volume brand.”
With a starting price of ₹7.89 lakh (ex-showroom) and a localization level of over 90%, it is confident of wooing incremental buyers. The Kylaq is built on the advanced MQB A0-IN platform, tailored specifically for the Indian market. It features a 1.0 TSI turbocharged petrol engine delivering 85 kW of power, paired with a six-speed manual or automatic transmission.
The SUV boasts over 25 standard active and passive safety features, including a multi-collision brake and six airbags. Notably, it introduces elements of Skoda's new Modern Solid design language to India.
The company claims that with the Kylaq, Skoda aims to strengthen its presence in India's compact SUV market by offering a vehicle that combines modern design, advanced safety features, and competitive pricing.
Skoda Auto India has officially commenced series production of its new compact SUV, the Kylaq, at the Pune manufacturing plant. This marks Skoda's third locally developed model, following the Kushaq and Slavia, and represents the company's first entry into India's highly popular sub-4-metre SUV segment.
Unique Go-to-Market Strategy with the Kylaq
Skoda Auto India has adopted a distinctive approach with the launch of its Kylaq compact SUV, focusing on localization and customer-centric strategies to better align with the Indian market. Departing from its traditional premium positioning, Skoda has tailored Kylaq’s pricing to compete directly in the value-conscious sub-4-meter SUV segment. This reflects a significant shift in strategy, aiming to expand its reach in a highly competitive market.
The company began its Kylaq journey over a year ago, generating early buzz through campaigns like “Name Your Skoda,” which fostered engagement and a sense of ownership among Indian customers. Skoda is also expanding its dealership network to over 350 touchpoints by mid-2025 and training 1,250 sales consultants to cater to a well-informed consumer base.
Additionally, Skoda has embraced a localized marketing strategy, including high-impact campaigns like its collaboration with Rohit Shetty. With export aspirations and a streamlined petrol-only lineup, the Kylaq represents a bold and innovative step for Skoda in India.
India to be back in top 3 markets for Skoda soon
In 2024, Skoda Auto delivered 926,600 vehicles globally, a 6.9% increase from the previous year. Germany remained the brand's largest market, with deliveries rising 18.5% year-on-year. However, sales in India and China declined during the same period. Skoda Auto delivered 36,000 vehicles in India in 2024, a 26.3% decrease from the previous year.
Kylaq could potentially bring India back to the number two position after Germany in less than two years. Not surprisingly, for Skoda, India is the second biggest production base outside of its home market in the Czech Republic. It has two factories in India—Chakan Pune with its mother brand, Volkswagen Group, and its assembly plant in Aurangabad.
Expanding Dealer Network
To support its growth aspirations, Skoda plans to expand its dealership and touchpoint network from the current 270 locations to over 350 by mid-2025. This move is expected to enhance the company’s footprint in Tier 2 and Tier 3 cities, allowing it to tap into previously underserved markets.
“We are growing our dealer network aggressively to ensure that Skoda is accessible in every financially viable market. For the first time, we are opening touchpoints in smaller pockets, providing customers with a high-quality sales and aftersales experience,” Janeba explained.
Export Opportunities
In addition to growing its domestic presence, Skoda is exploring export opportunities for the Kylaq and other models to build scale. The Kylaq is being considered for markets such as Australia, New Zealand, Southeast Asia, and Africa. While the initial focus remains on domestic sales, export volumes are expected to contribute significantly to the company’s overall production targets.
Janeba highlighted this potential, saying, “The Kylaq is uniquely positioned to appeal to international markets with a demand for compact, high-quality SUVs. With this model, we can extend our footprint beyond India and make it a global success story.”
Driving Long-term Growth
Janeba is cognizant that the company needs to sustain the model excitement in the world’s third-largest market to stay relevant.
Skoda is preparing for the future with plans to introduce new models and technologies. The company is working on a successor to the Kushaq, based on an advanced MQB A037 platform with hybrid capabilities, and is exploring launching a locally manufactured electric vehicle (EV).
Both models are expected to help Skoda strengthen its position in key segments and adapt to evolving consumer preferences and regulatory standards.
Regarding the company’s long-term vision, Janeba noted, “Kylaq is not just a new product; it is a cornerstone for Skoda’s growth in India. It is a platform that will support our plans for hybrid and EV introductions, which are critical for the future of mobility. Our investments in technology and localization will drive sustained growth.”
Skoda Auto India’s aggressive growth strategy underscores its commitment to becoming a volume-driven brand in one of the world’s largest automotive markets. By focusing on competitive pricing, localized production, an expanded dealer network, and export potential, Skoda aims to enhance its market presence in India significantly. With Kylaq as a key driver of this transformation, the company is poised to achieve its ambitious volume and market share targets.
Janeba concluded, “This is a pivotal moment for Skoda Auto India. We are not just entering a new segment but redefining how customers perceive the Skoda brand. Kylaq proves that we are serious about India, and it’s only the beginning of what’s coming.”