Is this the end of the cheap Skoda?

In contrast to Skoda’s budget heritage and its positioning in other markets, the Czech brand says it will continue to push upmarket locally because that’s what Aussies want.

Skoda Australia has long said its customers prefer highly-specified models and are happy to pay for them, and the latest example is the all-new 2022 Skoda Fabia, which is now on sale in a single Monte Carlo Edition 150 spec priced at $37,990 drive-away.

That’s a hefty rise for the Volkswagen Group brand’s smallest model, which in outgoing third-generation form was last priced from $18,390 plus on-road costs (or just $24,990 for the Monte Carlo flagship) and as little as $15,990 plus ORCs in 2016.

Skoda hasn’t ruled out the release of cheaper new Fabia variants at some stage, but it’s a similar story for the latest Octavia mid-sizer, the $33,890 admission price for which is over $10,000 up on its $22,490 entry point back in 2016.

Today, Skoda Australia’s cheapest car is the Scala hatchback (from $31,990 plus ORCs) and its most affordable SUV is the Kamiq (from $34,690 plus ORCs), rising to $41,490 for the Karoq mid-size SUV and $49,790 for the Kadiaq large SUV.

Topping the Skoda line-up is the Skoda Superb large car priced from $52,290 – up from $43,990 as recently as 2019.

But Skoda Australia director Michael Irmer is unapologetic for what he describes as “premium cars at premium prices” and says the upmarket strategy is simply what works for the brand and its consumers Down Under.

“One thing I would like to say is, we are not being forced to do anything here,” said Irmer when asked about the upmarket positioning of the new Fabia and the Skoda brand more generally.

“For Skoda in Australia, we’ve been on this journey since 2015 and it’s been proven. We started on the bigger cars and we brought it down to the medium and small cars as well and it works. It works for us.

“The feedback from customers and dealers is really good.”

A Skoda Australia spokesperson admitted the company knows “people will baulk at the price” of the new Fabia, and Irmer said customers who are “really budget-constrained” will simply look elsewhere.

“And that’s OK, because we don’t have enough cars anyway in the first place, so that means we can really develop the brand the way we’d like to [and] that would be an inspirational brand without the ownership worry.”

“I think that’s where we can really try to create a position in the market because many people are attracted to the idea that you don’t have any headaches with owning the product,” Irmer told carsales.

Skoda Australia reiterated the ownership value of the new Fabia in its press release announcing the new model, which nevertheless made it clear that higher prices were here to stay.

“Perhaps no new model better embodies Skoda’s journey in Australia than the new Fabia Monte Carlo,” Irmer was quoted as saying.

“Far from being a budget sticker European as it was initially perceived, last year the average drive-away price of a new Skoda was $52,000.

“The value of Skoda resides in providing the most metal, the very latest in technical sophistication and the best whole of life ownership proposition for the money. We have launched the new generation Fabia in its top line configuration because this is what our customers tell us they want from a Skoda.

“The Monte Carlo Edition 150 is packed with every item of equipment and technical refinement available, at a drive-away price and the best whole of life affordability of any European brand.”

While the global supply chain crisis and the increasing cost of materials and shipping continues to push new-vehicle prices higher across the globe, the Kia Picanto micro-car is now Australia’s cheapest new car (from $15,990 plus ORCs) following the axing of the Mitsubishi Mirage.

In the light-car segment in which the Skoda Fabia competes, the MG3 remains the cheapest (from $18,490 drive-away), while hotter hatches like the Ford Fiesta ST ($33,490 plus ORCs) and, despite a recent price hike, Hyundai i20N (now $34,990 plus ORCs) still undercut the new Monte Carlo.

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