Market Insight: Skoda future looks bright

CZECH brand Skoda ended 2015 with its best sales result since launching in Australia in late-2007 and the car-maker looks set to continue its steady pace, despite the diesel emissions scandal engulfing its parent company.

It was always going to be a tough task trying to break into the notoriously competitive Australian new-car market as an unknown quantity, but the Volkswagen Group-owned car-maker has been chipping away year on year, growing its brand awareness and sales volume.

In 2015, Skoda shifted 4750 units, representing a 23.3 per cent increase over its 2014 haul of 3853. This is in stark contrast to its first couple of years in Australia when it captured 818 sales in 2008 and 1252 in 2009, rising slightly to 1652 units in 2010.

Skoda had a limited line-up in those early days, with just the Octavia and the quirky – and recently discontinued – Roomster tall-boy hatch offered until 2009 when the large Superb sedan and wagon arrived. It wasn’t until the Fabia light car and the Yeti crossover arrived in 2011 that things started to pick up.

Sales hovered between 3501 and 3555 units from 2011 to 2013, but the arrival of the third-generation Octavia late in 2013 help boost sales to 3853 the following year.

The overall 2015 result was enough for it to overtake car-makers with longer histories in Australia, including Peugeot (4000) and Fiat (3945), while coming dangerously close to overtaking Swedish brand Volvo (4943).

The Volkswagen Group diesel emissions scandal does not appear to have had any short-term impact on Skoda’s sales in Australia, with its tally growing each month since the scandal broke in September compared with the corresponding month in 2014.

The other two brands involved, Audi and of course, Volkswagen, have had mixed results. Audi’s sales grew month-on-month since September last year compared with 2014, while VW’s have fluctuated.

In Skoda’s line-up, the Octavia is easily the best-selling model with 2128 sold in 2015, making up about 45 per cent of the company’s overall volume.

It outsold a number of more established rivals in the sub-$60,000 mid-size segment last year, including the Ford Mondeo (2120), Hyundai Sonata (1629) and i40 (1743), and Kia Optima (1052), as well as newer nameplates such as the Nissan Altima (1488) and Holden Malibu (1027).

The Octavia couldn’t get anywhere near the segment-leading Toyota Camry (27,654), but it was fifth in the segment behind the Mazda6 (5276), Subaru Liberty (4097) and the Volkswagen Passat (2292).

Other models in the line-up that experienced growth last year include the Fabia, which lifted by 38.6 per cent to 618 units on the back of an all-new model, and the under-appreciated Rapid, which finally attracted a few more buyers to rise 21.7 per cent to 448 units.

The results of the two smaller cars were solid for the brand but not good enough to put them anywhere near the top of their respective light- and small-car segments.

Yeti dropped by 2.3 per cent to 855 sales, keeping it at the back of the small-SUV pack, while the run-out Superb lost 24.8 per cent, hitting 264 units.

The small but consistent line-up is set to grow in the coming years, with confirmation that a new large SUV, which will sit above the Yeti, will make its debut at next month's Geneva motor show in concept guise as the VisionS.

It is likely to share its underpinnings with the Volkswagen-badged seven-seat SUV that was previewed by the CrossBlue concept from the 2013 Detroit motor show.

Given the large-SUV segment in Australia is the third-largest by volume and accounts for about 12 per cent of overall new-vehicle sales, and considering the wiser trend towards SUVs, Skoda's mystery SUV could provide the company with the volume to push further into the mainstream.

An all-new Superb is set to hit Australian showrooms in the next couple of months and while the large-car segment has been in decline for a number of years, niche models such as the big Skoda tend to fare better than some.

The introduction of Skoda’s new design language, showcased by the striking VisionC concept from last year’s Geneva show, as well as a big leap in terms of cabin comfort, safety and connectivity should ensure the new Superb strikes a chord with customers.

A guaranteed buy-back program that applies to private buyers was launched early last year and this could also have given consumers confidence in choosing a left-of-centre brand.

Skoda plays on its appeal to buyers that are in the market for a European car, but want something a little different, and the additions to the line-up as well as ongoing improvements to customer care, should ensure the quirky Czech brand finds a loyal following Down Under.