As Skoda Auto’s sub-4 metre Kylaq debuts in dealerships today, Petr Janeba admits that he is “extremely excited”.
“All of us are looking forward to welcoming customers in the showrooms on January 27 across all the 272 touch points. There will be cars for test drives and our sales consultants will be ready to answer questions,” the Brand Director of Skoda Auto India told ETAuto during a recent interaction in Goa.
According to him, Indian customers are well informed and know what they want which means “our consultants will be hard-pressed to keep up with the pace of questions”. This is where all the rigorous training imparted thus far will come in handy even while Janeba insists that “this car will still surprise people”.
As he explains, everyone expects top technology, quality, materials and safety from Skoda while the company “always endeavours” to go the extra mile and deliver more. “Kylaq is actually great because the engineers did a super job,” says a visibly pleased Janeba.
The fact remains that it was still relatively simple for them to develop it since this SUV inherited a platform from the higher segment. It therefore has the highest boot space in the category while safety and technology are all inherited traits too. The petrol-powered Kylaq comes in four versions at a starting ex-showroom price of INR 7.89 lakh.
Small is big
“Smaller India is actually getting bigger!” exclaims Janeba when asked what he thinks of Kylaq’s potential in smaller cities and towns. This means that expanding the network aggressively is an absolute imperative to ensure that customers in these regions manage to access the new offering.
From his point of view, the present tally of 272 touch points is still an underachievement because “we were knocking on doors in smaller cities and they said the brand was not so attractive for them to participate”. Alternatively, these potential dealers did not have time for Skoda since nobody had seen Kylaq.
“This was the scenario until October and we decided to wait since seeing is believing. Since November 6, everything has changed and we have had many enquiries for smaller cities and are now planning to go flat out. This target of 350 plus touch points will be achieved in six months or by August at the latest,” says Janeba.
This naturally implies that there is space to have more dealerships during the remainder of the year but he advocates caution instead since it is just not about going to customers once an outlet is opened up.
Financial viability
“We also need to ensure financial viability and sustainability along with assurance of growth for these dealers. In very small pockets in particular, this can become difficult,” he adds given that Skoda still has a modest car parc in India compared to other mass brands.
“It is still not at the level to ensure dealer viability and we need to bring volumes followed by after-sales almost immediately. People will look for local service in order to develop faith in the brand and we will definitely look at 350 touch points as a realistic target first,” says Janeba.
Among the most important components in steering the business are the regional managers who visit dealerships often and understand their strengths and weaknesses thoroughly. As part of the business model, Skoda internally has an India 1 and 2 structure where the latter comprises the south and east along with parts of the west.
India 1 is the bigger part of the west and north which are more novelty-driven and will be good for Kylaq. In contrast, the south is “very emotional” and the next campaign that is now being prepared will keep this trait in mind.
India 3 structure
There is no India 3 yet, smiles Janeba, but this may well become a reality as sales grow. When this happens, the geographical plotting will stop and be replaced by a new model that will keep smaller dealership viability in mind. These are typically retailers who sell about 20 cars a month and will need some serious handholding.
“India 3 will perhaps capture the small dealers and help out with the right policies for them to grow. If a regional manager is handling a dealer selling 150 cars a month and a small one is doing 15, they focus on the big one but we need to look at all including the small ones,” reiterates Janeba.
India’s rapidly growing sub 4 metre segment not only represents the best value-for-money proposition but for a lot of people “it is more than enough to make the first step into four-wheelers”. There is tremendous aspiration within this buyer base which is also drawing more women into the fold.
“We believe we can invite a lot of people with Kylaq who have been dreaming about Skoda but never thought about Kushaq and Slavia before,” he says. Kylaq has 13 potential rival models and Skoda is targeting a market share of 8% in this crowded space. Kushaq, in contrast, barely has 2.5% but was developed in the time when there was demand for “our high level quality, technology and precision” which came at a premium.
New story
“With Kylaq, we decided that we will be at 100% on a par with price (levels in this sub-4 metre product category) and this is a new story which is needed. People are aspirational but are not willing to overpay in this particular segment. In terms of space and roominess, we are one of the biggest here,” says Janeba.
While making it clear that the “story of Skoda will continue”, he adds that the following month will see the Czech carmaker introduce something that “I hope will move the whole brand again into a new era”. It will also follow the ‘peace of mind’ story which is the magic mantra for customers.
In the past, Skoda brought in a lot of iconic European cars. “Everybody loved the brand and car but nobody loved to pay for the service which was a little more expensive. This was driven by the fact that the parts came from Europe, took time, went through customs and ended up costing more money,” elaborates Janeba.
India 2.0 which kicked off with Kushaq and Slavia changed this completely thanks to over 80% local content which is now 96% in Kylaq. Parts are produced in India with local benchmarks as rivals and are immediately available. There are now competitive offers in place for service too.
“This is something nobody knows and we need to promote it. In in order to do so we will have a special feature for all the three cars by the end of February. We want customers to have a hassle-free journey with Skoda where they need to enjoy the drive and find the going simple,” signs off Janeba.
