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Skoda cuts Fabia tag, may fuel price war
Published on 14 Oct. 2010 1:03 AM IST
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A price war is expected to start in the competitive small car segment, ahead of the festive season. Days after Hyundai launched a new version of its i10 compact with only a marginal hike in prices, Skoda on Tuesday intensified the competition further by slashing price of the Fabia hatchback — its entrylevel car — by Rs.67,000 on the petrol variant and Rs.1.1 lakh on the diesel. In April, Huyndai had reduced price of its i20 model by Rs.40,000, stated Times news.
The Czech company, part of Euorpe’s top carmaker Volkswagen group, said the new pricing is expected to create a stir in the small car market and pump up the volumes of the Fabia by many scales. “We want to increase our stake in the Indian market, and have decided to make a thrust in the small car segment where the maximum volumes are. As part of this, we have gone on a new pricing for the Fabia that makes the car a compelling proposition and pits it aggressively to rivals,” SkodaAuto India director (sales & marketing) Thomas Kuehl told TOI.
The Fabia’s entry-level model will now cost Rs.4.35 lakh (ex-showroom Delhi) against the previous entry price of Rs.5.02 lakh, while the diesel will now cost Rs 5.4 lakh against the previous price of Rs.6.5 lakh. “We feel that we can make a good impact in the market if our cars are placed in the 3%-5% price range of what successful models from Maruti and Hyundai are placed at,” Kuehl said. The company, however, now gives only a single airbag on the entry model and this does not have a music system.
The Fabia, launched by Skoda in early 2008, failed to make any impact, mainly because the model was priced substantially higher than competing models like Maruti Swift and Hyundai i20. Skoda received a further jolt when parent German Volkswagen decided to price its Polo compact below Fabia - being the first instance globally when VW brand was being priced below Skoda. So, Fabia lagged when competing cars from the stable of Maruti (Ritz, new WagonR), Hyundai (i20), Volkswagen (Polo), Ford (Figo) and GM (Beat) caught on. The model managed to sell a poor 2820 units in the six months ending September at an average of 470 cars per month.

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