Skoda plans small EV, cheaper variants to take on French, Korean rivals

Skoda's new CEO, Thomas Schaefer, says the brand plans to launch cheaper model variants in Europe to better compete with Hyundai, Kia, as well as enter new markets in Africa, and expand its EV lineup with a small electric car. Schaefer, who took charge of the Volkswagen Group brand in August , spoke with Burkhard Riering, editor of Automobilwoche, a sister publication of Automotive News Europe.

Volkswagen unions in Germany complain that Skoda is competing with the group's core VW brand. What do you say to that?

The matter has been cleared up. Skoda is clearly positioned. Our models offer good value for money. We recently launched a great product on the market in Europe with our Enyaq iV [full-electric compact SUV]. At the same time, we need suitable products for regions where simpler cars are in demand. In India, we are now launching with the Kushaq small SUV. We plan to export the model from India to nearby regions.

On the electric side, we are working on vehicles below the Enyaq iV to gain a foothold in the smaller segments. That will happen relatively soon. By mid-decade, we will have at least one model below the Enyaq iV. Later, I can imagine an additional full-electric car the size of the Octavia. But that's more something for the second half of the decade.

How will Skoda better compete with brands such as Hyundai, Kia and Citroen?

The Korean and French automakers are strong in southern Europe. We can get closer to them with a new attractively priced, entry-level variants developed with tight bottom-line calculations. The Kodiaq (midsize SUV) is as example of this. If anyone in the VW Group can do that, it's us. Skoda is the savings champion.

Skoda is available in over 100 countries. Could the brand enter new markets?

The question is: Where are the attractive opportunities for us? In addition to India, since January we have also been responsible for Russia, including the former CIS states, and North Africa. There are many markets where I see a lot of potential for Skoda and the VW Group.

Why North Africa?

Look at Egypt or Algeria, where you can establish a car industry that creates jobs and supplies the markets locally, i.e. away from the imported second-hand market.

So with your own manufacturing?

Local production could be worthwhile at some point. Egypt has 100 million inhabitants, and the market is good for 700,000 to 800,000 vehicles per year. We want to be part of that.

Skoda has permanent capacity problems. Will the factory structure change again soon?

We have the right locations in the Czech Republic, Russia and India. My aim is to make even better use of their potential. That is part of the mandatory program. As far as capacity is concerned, by moving production of the Superb successor to Bratislava, we will create capacity for more than 150,000 vehicles at the Kvasiny plant from 2023.

Could you imagine entering a market in Africa, for example, without a combustion engine?

Africa is a special case, where something like this could happen. Some modern internal-combustion engines can no longer cope with the poor fuel quality in Africa. The Euro 7 emissions standard will mean that vehicles from Western Europe will no longer be sent to developing countries. In that case, e-mobility can be an alternative. The days of producing a single model for the whole world are definitely over. The complexity caused by country regulations and specifics has become too great.

In 10 years, will every Skoda model have some form of electric variant?

We are electrifying our entire model portfolio step by step. We are doing this in a sensible way, in other words, we are using the entire range of electrification -- from mild hybrids to full-electric cars. I expect Skoda to have an electric share of up to 60 percent by 2030.

What about alternative fuels such as natural gas?

That is not a popular topic in Europe and has not found political support. But I do think that natural gas has a chance in Africa, for example, where it is available locally. The costs for the customer are lower and natural gas is cleaner than the internal combustion engine. We are considering whether it makes sense to establish natural gas as a bridging technology in the emerging markets.

Many automakers say they want to become mobility service providers. What is Skoda's position on this?

Certainly, we will do more than just manufacture cars in the future. But the question is: What new business models do we need? I do not agree with the statement that in the future no one will own a car and everyone will just book a ride from A to B. This is a sensible solution in metropolitan regions. We have a quite successful start-up for this business -- HoppyGo, our car-sharing subsidiary, which increased its business in Prague by 50 percent in 2020.

At Skoda, everything has to be "Simply Clever" with details that make life easier. One example is the space for an umbrella in the door but is that "Simply Clever" in the 21st century?

That is a good point. We manage to inspire customers with simple solutions such as the ice scraper in the fuel filler cap. At the same time, we are thinking about how we can transfer this inventive spirit to the digital world - in other words, what does "Simply Clever 2.0" mean to us? It's not the ice scraper, but digital services that make our customers' everyday mobile lives easier and more convenient. We have set up an interdisciplinary team to look at what is possible and what fits the brand. I am convinced that surprising solutions will emerge.

Which ones, for example?

Take the Powerpass, for example, with which you can easily charge your e-car at charging stations from different providers, and we bill you centrally. That makes life much easier for our customers.