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Skoda to develop low-cost ‘Eco’ car platform for India

LiveMint logoLiveMint 27-09-2017 Hormazd Sorabjee, Autocar India

Mumbai: Skoda Auto has confirmed it will take the lead in developing a low-cost ‘Eco’ car platform for the Volkswagen Group to serve cost-sensitive markets like India.

The development comes a month after a memorandum of understanding (MoU) between Skoda, VW and Tata Motors Ltd, signed in March this year to jointly develop a low-cost platform using the Indian auto maker’s upcoming advanced modular platform (AMP), was officially called off.

Skoda’s ‘Eco’ platform will essentially be a re-engineered version of the VW Group’s MQB platform, a highly modular architecture that underpins almost all the current compact and mid-size models from VW Group brands. However, the MQB was proving too expensive for the Indian market because it is packaged for expensive hybrids, full-electric drivetrains, four-wheel drive vehicles and materials that meet global regulations and market requirements. In fact, the high cost of the MQB is the main reason why Skoda signed an MoU with Tata to explore using the significantly cheaper AMP. But now, Skoda has no choice but to make the MQB viable, and that means reducing costs significantly, to be able to meet the right price point for a future range of vehicles tailored for the Indian market.

Skoda’s engineers hope to ‘de-content’ the MQB by removing some of the technology that has no relevance here, to reduce cost and weight. It is also likely that the high-tensile steel body panels of MQB cars, which are hot stamped, will be replaced with cold stamped lower grade steel, which, according to a Skoda source, “will still exceed the standards in the Indian market”.

Economies of scale will be key for the MQB’s feasibility, especially if products are to be locally developed and produced.

Skoda is tight-lipped about volume projections but suppliers say they have been asked to quote for a production run of between 180,000 and 400,000 units. Clearly, the Indian market cannot support such volumes, especially as both VW and Skoda have stated they will not enter the budget end. Hence, Skoda will rely on exports to meet the volume needs and sees an opportunity to enter new markets with its Indian product range.

“First of all we need a stable footprint in India itself, but in the future we want to produce cars not just for the local market but also to export. Our footprint is in 102 international markets and we are planning to be in 120 markets by 2025. There are some markets that are good for cars produced in India,” said Bernhard Maier, global CEO of Skoda Auto.

After being on the fringes of the Indian market, Skoda now wants to get into the thick of it and is lining up a slew of bespoke products for India with SUVs leading the charge. The first model to be launched on the Eco platform is likely to be a five-seat, mid-size SUV to rival the Creta, but that won’t come until 2020. Autocar India

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