Road Ahead Is Tough, Says Skoda India On Profitability
A badge sits on the hood of a Skoda Auto AS Rapid automobile at the Volkswagen Group Rus OOO plant in Kaluga, Russia. (Photographer: Andrey Rudakov/Bloomberg)

Road Ahead Is Tough, Says Skoda India On Profitability


Admitting that its profit situation is "not good" in India, Czech car maker Skoda Auto has said the road ahead is "tough", even as it kick-started around Rs 8,000 crore investment plan under “India 2.0” project with the opening of a new technical centre in Pune.

Led by Skoda, the India 2.0 project aims at strengthening the parent Volkswagen Group's presence in India with tailor-made products by the two auto makers through the MQB A0 IN platform which is specially developed for India.

The setting up of the technology centre is a part of this project.

Skoda Auto India has reportedly seen a sharp 66.21 percent decline in its net profit to Rs 22.18 crore in the fiscal ended March 2018, impacted by higher expenses and a reduced financial support from the parent company. Its profit in fiscal 2016-17 reportedly stood at Rs 65.65 crore.

"We have a tough couple of years ahead of us...the profit situation is not particularly good. We are doing our best to run the current business far more efficiently," Volkswagen group India head Gurpratap Boparai said.

The group currently has a meager 2 percent market share in the country, which sold 3.28 million passenger vehicles in the last fiscal, registering a growth of 7.89 percent over financial year 2017.

Last calendar year, its sales declined by 22.5 percent to 37,038 units as against 47,796 units sold in 2017.

Besides enhancing the market share to 5 percent by 2025, the India 2.0 project also includes enhancing capacities at the group's two plants at Aurangabad and Pune as well as up to 95 percent localised products.

The technology centre at the company's Chakan manufacturing plant, inaugurated Saturday by Czech Prime Minister Andrej Babis along with Skoda Auto board member Christian Strube and Boparai, will deploy 250 Indian engineers.

They will be responsible for project management, electronics, infotainment, body design, interior, chassis, and complete vehicle. The Volkswagen Group and Skoda are jointly investing around Rs 2,000 crore in research and development projects. The first concept car based on the new platform will be displayed at the Delhi auto show next year.

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