Skoda on Verge of Market Entry

Skoda on Verge  of Market Entry
Skoda on Verge  of Market Entry

Following reports of Volkswagen's reentry into the Iranian automotive market after almost a five-year absence, the Wolfsburg Company's subsidiary brand, Skoda Auto, has also announced plans to come back to Iran.

According to Asre Khodro, the Czech-headquartered lower to mid-range brand aims to follow its larger parent company in the coming months.

The carmaker wishes to enter the market at the same time as VW offering its own range of vehicles, according to the automotive website that quoted Eghtesad News, a sister paper of Financial Tribune.

Thomas Kubik, a spokesman for the brand, said, "We at Skoda Auto are excited about the news of the P5+1 agreement between Iran and the international players. Iran is an attractive market."

Kubik stressed that Skoda has researched the Iranian market and believes that its vehicles will suit the budgetary constraints of Iran's middle-class consumers.

Volkswagen Group is now currently in negotiations with several Iran carmakers such as Iran Khodro.

"Previously, the group was monitoring current developments and leading first talks on a political level,” it said in an emailed response to questions.

“There are no decisions or resolutions yet, though. Possible further steps will be determined by future developments.”

Skoda vehicles, like those made by Dacia, are subsidiary brands that offer more affordable vehicles underpinned by the same technology as their family of vehicles.

Vehicles produced by the Prague-based company, which would be most suited to the local market, include the Skoda Citigo, a micro hatchback vehicles suitable for the urban environment. Another suitable candidate would be the medium-sized Fabia hatchback.  The Citigo retails in Europe for around $9,500 (350 million rials). With its blend of refinement, quality, practicality and low running costs, it sets the small car standard. It’s available as a three- and five-door, while all versions have the same eager 1-liter three-cylinder engine, with 59 bhp or 74 bhp.

The Fabia is priced around $15,000 (500 million rials). It is powered by a three-cylinder 1-liter MPI units with 60 ps and 75 ps, as seen in the Skoda Citigo. There also is the 1.2 four-cylinder TSI engine with 90 ps and 110 ps output.

Other cars, which could also make it to Iranian forecourts, are Skoda's range of large sedans. These vehicles would go head-to-head with cars like the Kia Cerato and high-end premium cars like the Bestern B30.

The Skoda Octavia a large sedan model is one of Europe's best-selling affordable sedans. Often used as taxis and bought by fleets in the United Kingdom, Octavio runs on many of the same underpinnings as the Audi A4 and Volkswagen Passat. Priced at $18,500 (700 million rials), the car could easily become a popular vehicle among Iranian businessmen.

Other popular alternative include the Skoda Yeti, a van like car with a high ceiling for multiuse and taxi purposes, as well as the Skoda Superb, a large vehicle that aims to tackle top-end vehicles like Mercedes-Benz and BMW.

If negotiations lead to a binding agreement and both VW and Skoda enter the market at the same time, Iranian companies could quickly develop an entire range of vehicles off the back of the joint Skoda-VW offer. This will lead to sustainable cooperation with the leading German company in a short period of time.