[anjan_c2007]

Now two decades after entering India, Skoda's Global CEO, Klaus Zelmer says that their over-engineered cars launched in India were a mistake committed by the group. Their proposed sub 4-metre SUV that's touted to be introduced early next year is set to change their old perceptions with the over-engineered cars, which according to the CEO were also over-priced. The CEO quips "Competitors are outselling us. There's room for more if we get the sweet spot better. There are certain things which are undebatable. People who buy European cars in India go for quality. The cost reduction potential for us is exactly what we've done with the Sub 4-metre".

The new compact SUV will be the third Škoda product on the MQB-A0-IN platform which is the first platform developed by the company outside of Europe and tailormade for the Indian market. The platform enables the use of efficient engines and advanced safety systems, specifically for the Indian market and to meet the country’s new, stricter safety and emission requirements.

According to the release, about 50% of Skoda cars manufactured outside of the Czech Republic are produced in India, and the company's export strategy of India-developed products, too, will see a renewed focus going forward.

"The sub 4m SUV will have 75-76% localisation. Its pricing will use excise benefits and pass them on to customers. What we are going to do differently is to learn from the lessons so far. We had a really good start with the 2.0 products," he adds.

The car will be produced in the same production line where the 2.0 products like Kushaq and Slavia are made. Its production capacity is 270,000 cars per year in the Pune plant for Skoda and Volkswagen combined. Skoda Auto expects a potential annual volume of over 90,000 units to serve both the domestic and export markets of Skoda, which is trying to build its presence in Southeast Asia, the Middle East, the Commonwealth of Independent States and North Africa.

https://www.autocarpro.in/news/skoda...market--121247

The second newslink below details another facet of the Skoda CEO's media interaction, wherein he has mooted the idea of selling a stake from their total investment in India, in favour of an equity partner. The media report states that German auto giant Volkswagen is in talks to sell stake in its India business to a local partner, having failed to crack the market, despite investing over $2 billion in the country.

Klaus Zelmer, the CEO revealed about reasons for talks with potential local partners - where Mahindra & Mahindra is understood to be the front-runner - Zelmer said, "We have been in India for over 20 years and have not proven to be on the right track. So, you try a new track. I am convinced that if we find the right partner, then we can only learn and benefit from each other... "

The VW Group that has been manufacturing and selling their cars since the Beetle/Kombi times in third world nations with plants in Mexico, Brazil and quite a few other countries. And here in India, it took two decades to make a wake up call after making losses with very low sales in our market. That's alarming and shows their disinterest during the past two decades in fully understanding the Indian market. They like any other Western automobile manufacturer had their noses high up in the air, hoping that customers will make a beeline into their showrooms for their so called "OVERENGINEERED" cars. They ignored their own misdoings like high cost of spares, overpriced service centre bills and the mostly not so customer friendly dealers.

As regards "overengineered cars" does the definition by VW mean not to go for such cars, but instead launch "under-engineered" cars. In the latter category we saw the likes of the Fiat Uno, Peugeot 309/309 GLD, Ford Escort, Renault Logan/ Verito all from the West, that were cars whose obituaries were written in the Western markets and were subsequently launched here only to flop?

Now Mahindra had been collaborating/ in JV's with Willys Overland, KaiserJeep, Jeep, Peugeot, Ford (Europe), Renault and now Volkswagen hints at a liason with Mahindra as a tool for their VW India to RISE. Evidently, the recent huge waiting lists for the XUV700, Scorpio N and the continuing waiting list for the Thar are special attractions for the VW Group. But Mahindra needs to be very wise enough not to again end up with VW the way it did with Ssangyong and with Renault with their Mahindra Logans/Veritos!

If the VW-Mahindra JV comes through, the VW Group with their 2024 wake-up call needs to take the best advantage of Mahindra’s seven decade manufacturing and marketing experience in India, if they sincerely wish to emerge from the sales mess and cesspool that they had created for themselves.

https://timesofindia.indiatimes.com/.../111387273.cms

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EDIT: Adding one more news article:

Originally Posted by Rajeevraj

Finally a proper report on what all the CEO said and meant. Glad to see a proper detailed report without any half truths and sensationalism.

https://timesofindia.indiatimes.com/.../111486398.cms

[DicKy]

We all know what is under that marketing spiel of cars that are not 'over-engineered'. Does the Kushaq/Slavia/Virtus/Taigun come under 'over-engineered' cars too?

Do value engineering regards to features and perceived interior quality, but please don't cheapen on the core areas and create another EPC fiasco or skrimp on stuff like AC compressor size/strength.

[ajmat]

Unfortunately, that why I bought these cars earlier!

The solidity and heft!
The durability and quality!

[volkman10]

Historically if Mahindra steps in (by buying stake), it will be a disaster for Skoda

[dgindia]

True, Indian market is different from Europe or North America. The driving conditions are poles apart.

Also the international auto manufacturers faces a peculiar situation of competition in unique India specific category of "sub-4 metre car" with substantially lower taxes. This has huge impact on the buyers at lower end of pyramid.

It is very challenging to find a perfect solution matching the suitable performance expectations with appropriate pricing to sway the value customers. Even FMCG companies have learnt this the hard way.

With growing economy, there will be greater number of customers in India, with more disposable income to spend on their dream machine.

It will be interesting to see how various auto companies achieve their own sweet-spot.

[Cresterk]

So does this mean they won’t purposefully engineer cars with flimsy plastic bits in the engine and gearbox that will grenade itself right out of warranty as a form of planned obsolescence?

Or that they will start selling KUV100s with a Skoda badge?

[PreludeSH]

If over-engineered are only to some extent reliable, what will happen to just or under-engineered cars from them?

Do they mean that they add more weight to every part and call it over-engineered which increases the price? I dont think mechanical parts that are part of drivetrain can be overengineered without losing efficiency.

[Rajeevraj]

Seems to be a very confusing article. Some strange things for a CEO to say. Not sure if things were lost in translation and the reporting team made some of their own assumptions.

I am not even sure what overengineering means. It was the concerns with reliability, cost of maintenance, bringing in the right models, average sales and service experience that caused the VAG group cars to always underperform. Overengineering(what ever it means) is not the issue to fix here in my view. Who does not love overengineered cars if the aspects of cost of ownership are taken care off well. That is not something to be fixed by under engineering the cars. Weird thought process.

[arunphilip]

The day when "over-engineered" became a bad word was a sad day for all consumers.

[GForceEnjoyer]

The fact that these cars were "over-engineered" was literally the very reason so many of us chose to buy them! They're now saying that launching the very cars that built them their reputation in India was a mistake??? They seem to be defining "over-engineered" as "with above par quality and features."

That's not "over-engineered," that's the stuff that gave them the competitive advantage that allowed quite a few to overlook the rather "questionable" reliability and aftersales experiences, from the dry-clutch DSG disasters all the way to the EPC fiascos! I wonder which reasons a customer would buy their future "under-engineered" cars for.

Partnering with a brand that has an ethos significantly different to theirs (which by itself seems to be having an identity crisis these days) is sure to spell out disaster for them, especially one with a partnership track record like Mahindra's. I think VW needs to figure out what strengths they can even play to before thinking about stuff like this.

[avira_tk]

I think they mean it's better to have features that sell than intangibles that customers will appreciate in the long run. I agree with that, having shifted from a punto to a sonet.

[Thad E Ginathom]

Originally Posted by Cresterk

So does this mean they won’t purposefully engineer cars with flimsy plastic bits in the engine and gearbox that will grenade itself right out of warranty as a form of planned obsolescence?

I'm glad to know that the Polo air vents, parts that should last the life of the car, were over-engineered! If they had been under-engineered, I doubt that they would have lasted the trip home from the dealer.

I'm still a VW fanboy, but this news, that promises to make their already-cut-back Indian vehicles worse, is not good.

[Bhodrolok]

This is a sad day for us car enthusiasts in India. But the market wants what it wants and its not ready to pay for well-engineered cars.

[volkman10]

Skoda is looking for a 'true partner', has to be on eye level for both, and have to benefit each other, and then it can be a be a lot more successful than in past.

It's a bit like getting married without a contract.

It means (getting access to) engineering competence, sales competence, procurement competence.

It will not be right to say that we are a weak partner who is looking for directions, for somebody to lead us.

Skoda talks the Toyota way: bets on customer preference, seeks tax incentives for Hybrids.

The funny thing is, we always come from regulatory environment of government or manufacturers…let’s ask consumers...any business is always on the right path if you respect consumers…this is what we need to do. Looking around the globe, the preference is not just EV, the preference is not just internal combustion engine (ICE), it is something in between.

We will not be able to force the people to buy the battery electric vehicle (BEV) just like that. It will not happen. We need something in between



Mahindra, are you still game for this or seeing an opportunity like Ford's JV?

Link:

[sudeepg]

Over engineered cars that broke down often.
Over engineered cars that were sold by deceit.
Over engineered cars that were difficult and expensive to maintain.
Over engineered cars that their mechanics could not fix.

They couldn't look to the left and right and see how Toyota, Hyundai, Kia and the likes produced much reliable cars with much better customer care.

No doubt VW cars were desirable, but their reliability, services were left much to be desired. I think their marriage with a local partner will never work because they wouldn't go shoulder to shoulder in supporting their partners. All they will do is thrust the entire responsibility onto the partner, who may eventually give up. Better not to try.