Skoda’s entry the to the US has been delayed after taking the lead for a low-cost car project in India
Skoda CEO Bernhard Maier had previously said that Skoda was actively assessing the opportunity of launching in the US, potentially taking the lead for sales in the wake of the VW Dieselgate scandal because of its relatively untarnished image in the region. He had indicated that the firm’s investigations would be complete by the end of this year.
However, earlier this year the VW Group entered a co-operation with Tata Motors in order to co-develop a low-cost car for emerging markets. When cost targets weren’t hit, however, the partnership was dissolved, and Skoda’s bosses asked the lead the initiative.
“We will need more time to work on the US plans now,” said Maier. “The Group has asked us to lead development of a platform with a strong focus on India and to investigate building that business sustainably and in a predictable manner.
“That is a huge task, and we must always approach projects one step at a time. There is no hurry to rush into the US and no deadline to even decide if we should be looking to go there. There’s no need to make a decision right away.”
At present, Skoda is said to be assessing whether the VW Group’s MQB A0 platform – as used on cars including the new VW Polo and Seat Ibiza – could form the basis for a low-cost vehicle, although Maier has hinted forging another joint venture is possible if it makes more sense financially. If it chooses to launch on its own platform, VW faces having to set up the entire manufacturing infrastructure in India.
“It’s clear that without radical localisation and the related cost advantages, we will be unable to turn the MQB A0 platform into a competitive tool in India,” he told Reuters.
The task is made harder because new, tougher crash and emissions regulations will come into effect in India from 2020 – the year the country is expected to become the world’s third largest car market, behind China and the USA.
Once established in India, insiders expect the low-cost car to be launched in South America and the Middle East. Concurrently, the VW Group is developing a low-cost car for sale in China with its partners there, which is expected to launch in 2019.