Skoda bets on driving 'feel' as Chinese rivals undercut on price

Skoda says the driving experience remains an important point of difference as Australia's new-car market becomes increasingly competitive. The brand's sales have stayed broadly flat as more challenger brands enter the market and around 40 per cent of its new car sales are now electrified.

Skoda says Australian buyers still care about how a car drives, despite the growing focus on price and equipment as competition from Chinese challenger brands intensifies.

China is now Australia's biggest source of new-vehicle imports year-to-date according to VFACTS sales data, reflecting the rapid growth of Chinese-built cars in the local market.

That shift comes as Skoda's own sales remain broadly flat, which the brand says represents a relatively solid result given the current market conditions.

The company expects Australia's automotive industry to take another three to five years to find its “new normal” with around 80 new car brands now competing for customer attention.

Skoda Australia brand director Lucie Kuhn said manufacturers could no longer simply chase higher volumes, instead needing to find a sustainable balance between sales, pricing and profitability.

“We’re not pushing volumes anymore just simply on a balance,” Kuhn said.

Price is nevertheless becoming increasingly important, with Chinese manufacturers bringing aggressive pricing and high levels of standard equipment to Australia.

But Skoda believes buyers still notice what happens once they get behind the wheel.

Asked whether customers notice a difference between Skoda and cheaper competitors, Kuhn said it was “a bit of both”.

Customers are “rather positive” about how Skoda cars feel while driving and also see their interiors or cabins in a positive light, she said.

“To actually meet the expectations of the customers … they expect a level of driving refinement,” she said.

The brand believes that gives it a point of difference without having to compete solely on price.

The brand is also seeing strong uptake of electric vehicles, with around 40 per cent of Skoda's Australian sales now electrified, with the brand predicting EVs could settle at around 20 per cent of the overall market.

The Skoda exec explained that EVs were becoming increasingly normalised as more consumers saw friends and neighbours driving them and she added that rising fuel and living costs could encourage further adoption.

Skoda's next volume opportunities will come from the Epiq and Peaq, which are due to expand its Australian EV range from 2027.

The Epiq will sit at the smaller end of the range, while the Peaq will become Skoda's large seven-seat electric flagship.

The company also believes electrification is changing brand loyalty, with customers increasingly willing to consider manufacturers outside their traditional shortlist.

“Customers don't stick to the brands they used to … all [their] life,” Kuhn said.

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