Skoda caught out by fuel prices

Skoda has ditched the 1.9-litre diesel-engined Octavia variants in the newly-facelifted range due to go on sale next month. In its place comes a cheaper, 1.6-litre petrol variant.

The upgraded Octavia was revealed to the Australian public at the Melbourne International Motor Show earlier today, boasting a distinctive frontal treatment with headlights that knock some of the angular edges off the design.

Inside, the Octavia has been upgraded also and offers buyers the options of improved audio and satellite navigation systems. Mechanically, the 1.8 TSI models are now available with the option of a seven-speed DSG transmission in addition to the standard six-speed manual.

This new transmission (for the Skoda range in Australia) provides gains in weight and efficiency by employing a dry-plate clutch system rather than the conventional wet-plate clutches of earlier DSG boxes. Without the need for an engine-driven hydraulic pump, fuel efficiency is improved by reducing friction-related losses. As a variant, the Octavia 1.8 TSI with DSG replaces the previous model with 2.0 FSI engine (naturally-aspirated direct injection) and automatic transmission.

Where specifications are directly comparable, the Octavia has risen slightly in price, but the new entry-level model, the 1.6-litre petrol Octavia, starts from $26,990 for the five-speed manual liftback variant. That's not much more than for a premium small car, yet the Octavia provides mid-size packaging.

In the past, Skoda has admitted that the premium-priced Octavia variants sell better than the lower-priced models in the range, prompting the Carsales Network to query the justification for an even cheaper entry-level model with Head of Skoda Australia, Matthew Wiesner. 

"We needed to have an entry car," he stated. "The previous one was the 1.9 TDI. Two years ago, when we decided that was the way to go, diesel and petrol prices were actually much closer."

At the time the product planning decision was made to replace the 1.9 diesel variants with the 1.6 petrol cars, the gap between petrol and diesel prices had "widened", says Wiesner.

"That's the main reason," he continued. "We thought 'how do we have a more aggressive entry point than previous? There's a problem with the diesel prices, so let's now see what else we can do'. So we got it down to the $26,990 price point, which actually brings us down to that small-car [level]."

Now that the fuel prices have come down considerably and the gap between diesel and petrol pricing has not only narrowed -- but diesel is actually cheaper than petrol in many parts of the country -- the importer is left with an entry-level car which will have to win sales largely on the strength of its selling price, developing a meagre output of 75kW and 148Nm of torque as it does.

In addition to the updated Octavia range, Skoda also displayed the Superb, which goes on sale in June, priced from $42,990 for the 1.8-litre TSI variant (with seven-speed DSG transmission), up to $56,990 for the 3.6-litre V6 all-wheel drive model. At that price, the V6 Superb comes in just under the Luxury Car Tax, as anticipated in our original news story from last year (more here). The importer is yet to announce the price for the diesel variant that will slot in between the four-cylinder petrol turbo model and the V6 Superb.

Since the Superb is a car not easily 'pigeonholed', we asked Wiesner about how the car would be marketed and whether the company had conducted any market research in Australia. It will be allocated to the VFACTS large-car segment, going up against cars that tend to be wider, but not necessarily as accommodating in leg- and head-room, or luggage capacity. And those are a couple of the virtues that have recommended the car in local market research clinics have given the car a thumbs up. Has that then led Skoda to reevaluate its sales forecast for the car?

"We'll wait and see," says Wiesner. "Put it this way, we're quietly confident about how the car will be received."

"Probably come the time we launch -- say about June -- we'll have a much better indication as to how the reaction's going to be."