Global Skoda boss acknowledges sharp price rises in Australia, says help is on the way

Some popular Skoda cars could soon be in line for a price cut in Australia – or be joined by more affordable variants – or both.

The global boss of the Volkswagen-owned, Czech-based car brand Skoda, Klaus Zellmer, says price rises over the past three years were unavoidable due to parts shortages and manufacturing cost increases.

As with other car companies, this bottleneck prompted Skoda to prioritise more profitable models and pause production of its most affordable variants.

The most extreme example: three years ago the Skoda Fabia range started from $17,790 plus on-road costs.

Today, the cheapest Fabia variant available in Australia starts from $38,590. Although it is a new model with a bigger engine and more features, the entry price for Skoda’s cheapest hatch leapt by more than $20,000. 

Like-for-like models – such as the Skoda Kamiq city SUV – have seen their starting prices increase by $8500 for the same car with little or no extra equipment. In this instance it represented a price rise of about 30 per cent from $26,990 in early 2021, to $35,490 today. 

When asked why Skoda has been so aggressive with its price increases – especially given that they did not necessarily coincide with new models or extra features – the top executive said: “That’s work in progress and I understand the criticism.”

The global Skoda boss told a roundtable briefing with Australian media during last week’s Munich motor show: “We all know the crazy times we all went through with COVID and the semiconductor shortages.

“You have to optimise the restricted number of cars that you can sell and the profit that you need to stay above the water.

“We actually did reasonably well at Skoda … our profitability, also through COVID, semiconductors and the loss of production capacity, we did that well. But we are very well aware there is a bit of homework there to do for Australia and for us (on price).”

The Skoda boss said there is now an intention to reintroduce some recently deleted models, and did not rule out the possibility of reviewing current price guidelines.

“We know the Fabia is a different price in Australia, we’ve heard that,” said Mr Zellmer.

“We need to bring in more derivatives, not just the (top-of-the-range) Monte Carlo. We are very aware of that.”

When asked to comment on Skoda Australia’s recent results – after figures showed sales fell by almost 30 per cent from 2021 to 2022, in an industry that grew by 3 per cent over the same period, the executive told the media gathering: 

“We had a very solid performance until COVID, then we had a decline (for) two years in market share and volume.

“In 2024 we are very optimistic. We are going to launch a couple of derivatives or new models, also the Enyaq (electric SUV). This is where we see us hitting higher numbers in 2024.”

When asked if Skoda was no longer the value brand that sat underneath Volkswagen – especially in the wake of the recent price hikes, Mr Zellmer, said:

“I think we are now on eye-level (with Volkswagen). We have to make sure that Volkswagen and us, we don’t get into each other’s way.”

The executive said the idea of selling Volkswagen and Skoda cars alongside each other was designed to give customers more choice.

“The differentiation between Skoda and Volkswagen and Seat/Cupra is the design,” he said.

“One very good example,” he said, was the upcoming Skoda Enyaq electric SUV versus the technically identical Volkswagen ID.4.

“They are completely different cars (even though) they share the same platform, they share many synergies, and many cost-saving potentials were (achieved). This is where we are going.

“We want to spread horizontally to increase our footprint in the (new-car) market and cover bigger audiences, and don’t step on each other’s feet all the time.”

The post Global Skoda boss acknowledges sharp price rises in Australia, says help is on the way appeared first on Drive.