Skoda India to set up its finance arm shortly

Following cues from other automakers like Bajaj Auto, Tata Motors, Maruti Suzuki, Hero Honda, Mahindra and Mahindra, the Czech car maker Skoda Auto has decided to step on the gas by planning to leverage on its non-banking financial arm in India to help accelerate sales. It has been learnt from well-informed sources that the company will set up its finance arm ? Skoda Finance ? in the country by the year-end. It is widely believed that the decision comes on account of the financial credit crunch due to tightening of lending norms by banks and other financial institutions in addition to steep interest rates.According to a senior representative of Skoda Auto India, the company has decided to bring in Skoda Finance in India as 80 per cent of their sales are financed. He added that the finance outfit, which would be operational by the end of this year, would be offering very competitive interest rates to attract its customers.

The Czech company, which is part of the Volkswagen Group, came to India in November, 2001 and has a manufacturing facility at Shendra near Aurangabad, Maharashtra. The company aims to launch SUVs, MUVs and a car that would be priced below their Fabia model. Skoda India will also be expanding its dealership across the country. Currently, it has 56 dealerships and by 2009, it will be increased to 75 countrywide. The company currently sells four models in the country, including the Fabia hatchback, the Octavia, Laura and Superb sedans in the price range of Rs. 4.8 lakh to Rs. 24 lakh. Since Fabia’s launch early this year, the company’s sales have shot up by more than 74 per cent with the sales reaching nearly 8,000 units until August’08. Skoda Auto has lined up at least four new models in India during 2009, out of which a couple of them will be replacement models. It will launch the new Superb by January’09, followed by the all-new Laura, the Fabia Sports and Fabia Combi. The Fabia Sports will carry a tag of Rs. 10 lakh, while the Fabia Combi is expected to be built on parent company Volkswagen?s B6 platform. Skoda plans to sell 20,000 units in this calendar year against 13,000 units last year. It has already sold 9,556 cars in the first six months of 2008.

Source:.wheelsunplugged.com

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