Skoda to move down-market

Skoda will head down-market, Seat will move up-market and Volkswagen will stay as it is following a reshuffle of the Volkswagen Group’s volume brand strategy.

The Volkswagen Group’s head of product strategy, Michael Jost, confirmed the moves to German magazine Automobilwoche.

In a bid to prevent the German giant’s mainstream brands from stepping on each other’s toes, Skoda will head down in price and equipment to protect it from brands like South Korea’s Hyundai and Kia, along with Renault’s Dacia and Japan’s Suzuki, all of which have attacked the Volkswagen Group’s market share in Eastern Europe.

Meantime Seat, which is no longer present in Australia, will twist its focus to be more in line with its go-fast Cupra sub-brand, while Volkswagen remained the “everyman” brand.

"We want to manage our brand identities more clearly in future," Jost told the magazine.

"Seat could represent even more emotional cars, as exemplified by its Cupra models.

“Skoda could serve eastern Europe markets more intensively, as well as customers seeking functionality, even more intensively," he said.

While the Volkswagen Group has long sought to buy Alfa Romeo from the Fiat Chrysler Automobiles group, it will now instead push Seat to become the most passionate of its volume brands.

Meantime, the down-market push for its sister brand Skoda in Europe is at odds with the Czech car-maker’s positioning in Australia, where premium model variants account for a large proportion of its sales and where price cuts aren’t expected any time soon.

That said, Skoda says it is now officially a mainstream brand in Australia, where it was officially launched in 2007, will hit 7000 sales this year and expects to reach 10,000 sales within a couple of years, thanks to upcoming models like the all-new Scala hatch and Kamiq small SUV.