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Profit situation "not good" in India, road ahead is "tough": Skoda Auto

Devdiscourse News Desk pune India
Updated: 20-01-2019 20:25 IST
Profit situation "not good" in India, road ahead is "tough": Skoda Auto

Image Credit: Reuters

Admitting that its profit situation is "not good" in India, Czech carmaker Skoda Auto has said the road ahead is "tough", even as it kick-started an around Rs 8,000 crore investment plan under 'India 2.0' project with the opening of a new technical centre here. Led by Skoda, the India 2.0 project aims at strengthening the parent Volkswagen Group's presence in India with tailor-made products by the two auto makers through the MQB A0 IN platform which is specially developed for India.

The setting up of the technology centre is a part of this project. Skoda Auto India has reportedly seen a sharp 66.21 per cent decline in its net profit to Rs 22.18 crore in the fiscal ended March 2018, impacted by higher expenses and a reduced financial support from the parent company. Its profit in fiscal 2016-17 reportedly stood at Rs 65.65 crore. "We have a tough couple of years ahead of us...the profit situation is not particularly good. We are doing our best to run the current business far more efficiently," Volkswagen group India head Gurpratap Boparai said. The group currently has a meagre 2 per cent market share in the country, which sold 3.28 million passengers vehicles in the last fiscal, registering a growth of 7.89 per cent over the FY17. Last calendar year, its sales declined by 22.5 per cent to 37,038 units as against 47,796 units sold in 2017.

Besides enhancing the market share to 5 per cent by 2025, the India 2.0 project also includes enhancing capacities at the group's two plants at Aurangabad and Pune as well as up to 95 per cent localised products. The technology centre at the company's Chakan manufacturing plant, inaugurated Saturday by Czech Prime Minister Andrej Babis along with Skoda Aut board member Christian Strube and Boparai, will deploy 250 Indian engineers. They will be responsible for project management, electronics, infotainment, body design, interior, chassis, and complete vehicle. The Volkswagen Group and Skoda are jointly investing around Rs 2,000 crore (Euro 250 million) in research and development projects. The first concept car based on the new platform will be displayed at the Delhi auto show next year.

(With inputs from agencies.)