Skoda has sought to reassure its employees after reports suggested that its owner, Volkswagen Group, is considering repositioning the brand downward to compete with low-cost marques such as Renault's Dacia.
In an internal letter to employees seen by Automotive News Europe, Skoda CEO Bernhard Maier wrote that brand values of space, functionality, value for money and forward-looking design "will not change in the future."
Germany's Suddeutsche Zeitung newspaper said Skoda could be the biggest loser in a review of the market positioning of VW Groups brands including the core VW marque, together with Seat, Porsche, Audi, Bentley and Lamborghini.
VW Group CEO Herbert Diess aims to reduce overlap between brands as he pushes to improve profitability at the automaker, the paper said.
In particular, Diess wants to boost the VW brand by reducing competition with sister brands Skoda and Seat. "If three or four brands with similar products fight for the same target group, then all the brands suffer," the paper quoted Diess as saying.
"That's why we need to broaden our positioning, adjust our positioning if necessary and still intensify synergies," he said.
The comments by Diess echo similar remarks made by VW Group's product strategy chief Michael Jost told Automobilwoche, a sister publication of Automotive News Europe.
Jost said VW Group wanted to manage brand identities more clearly in future.
"Seat could represent even more emotional cars, as exemplified by its Cupra models. Skoda could serve eastern Europe markets more intensively, as well as customers seeking functionality even more intensively," he told Automobilwoche.
Skoda would concentrate on selling cars priced between 10,000 and 20,000 euros, Suddeutsche Zeitung said, although the brand will keep its Superb flagship car for at least another generation.
Skoda's Maier played down worries about a big change at the brand
"Reviewing brand positioning is one of the core tasks for the strategy department of a multi-brand corporation. This is a normal process," he told staff in his letter.
Maier pointed to VW Group's decision to build a new plant for the next Skoda Superb and VW Passat midsize cars as evidence of the group’s confidence in the Skoda brand.
VW had picked Manisa on Turkey's western coast, for the 1.3 billion-euro ($1.4 billion) plant, with production scheduled to start in 2022 but the automaker has postponed a final decision amid international criticism of the country's military operation in Syria.
Bulgaria, Romania and Serbia are hoping that VW returns to its earlier shortlist of sites, which featured the Balkan nations and North Africa.