“Localisation is the Key”

Dr Eckhard Scholz, Member of the Board of Management, Technical Development, Skoda Auto a.s

How does vehicle development happen at Skoda ?
We start with a product idea. We look if it makes sense; the price parameters, the dimensions and the volumes. We then analyse the idea and firm up on the technology that goes into it. For every programme we look at synergies.

Do synergies and technology hint at Skoda being part of the Volkswagen Group?
When we are thinking about technology we are looking at aggregates. About chassis, electronics, etc. One big factor is design. Design is integral and unique to Skoda. The engine may be common to Volkswagen, but the feel and appearance has to be Skoda. Any specific technological development is unique to Skoda; like the twin-door system of the Superb.

Technologically, how does a Skoda distinguish itself from a Volkswagen?
With any new car we dial-in a unique aspect that defines a Skoda from a Volkswagen. Volumes matter when it comes to engines or mechanicals but with appearance or looks a Skoda is different from a Volkswagen. We work on a price brief and therefore manage to be competitive. Because of high volumes we manage to estimate component prices and thus work out competitive prices. Important criteria like electronic systems, accessories, body, etc., are price brief derived.

Skoda is considered as the economy brand in the Volkswagen Group? How do you manage the costs?
Our aim is to have an attractive entry price. We have to be cost effective and aim at a price below Volkswagen. We aim at offering attractively priced vehicles though we have the independence to move up if Volkswagen does not have such a vehicle. Like all Volkswagen Group companies, we are a technologically driven company.
The Skoda Fabia is made at Chakan along with the Volkswagen Polo. At Skoda’s Aurangabad plant other Skoda models share the line with Audi and Volkswagen cars.

Is Chakan the mass manufacturing site and Aurangabad dedicated to big, luxury cars?
By moving to Chakan we are able to localise faster. We can therefore reduce cost. The Fabia and Polo are based on the same platform. With the Fabia alone, localisation would have been difficult. With the Polo it is possible. Also, the Aurangabad plant of Skoda assembles the Audi and Volkswagen vehicles from CKD kits.

Is India the only location where different Volkswagen Group brands are made at the same facility?
Making different brands is not new to Volkswagen. The group does it in China and a few other locations. We produce Audi and Volkswagen brands together. We do that when it makes sense. We do try to make Skoda products in Skoda factories wherever possible. With high capacity at Chakan it was necessary that the Fabia be made at Chakan. It would justify making Fabia at Chakan because of the price.

How are the assembly lines, sub-assembly stations and the supply chain managed under such situations; the technicalities in short?
Considering factors like the supply chain and other factors its makes sense to have the same technical platform to manufacture. Technology within the Volkswagen is jointly developed. At Skoda we seek the most modern technology. The Yeti is a technological example and contains modern technology. In Yeti we have tried out new ideas – in electronics and other areas.

What new developments do you think would emerge in the near future?
We are looking at new product generation and alternate energy driven vehicles. Personally I have my doubts about the viability of electric driven vehicles, the hybrids look promising. Every automaker is working in this direction and it would thus be essential to look at them.