Czech brand considering what buyers are willing to spend
How much would you pay for a Skoda? It’s a question the Czech brand’s local arm has been thinking about, because buyers are seemingly keen to spend more and more on their cars.
This month saw Skoda introduce its most expensive variant, with the new Superb Sportline model. It tops out at $53,690 plus on-road costs for the wagon, before you add any of the optional packs, paint and sun-roof. All told, you could feasibly spend $65,000 on it.
And is that too much for buyers to swallow? No. Not on the evidence seen by Skoda’s Australian director, Michael Irmer.
“I’m not sure our customers will stretch into the six digits yet, but we’re working on the upper side of five digits,” Irmer said.
“I think it’s probably in our minds more so than anywhere else,” Irmer said of the brand’s internal musings. “We spoke about this a few times and it’s proven by all the stats.
“The most sold Octavia is an RS wagon with metallic paint, the Tech Pack, DSG with the 162TSI petrol engine for a drive-away price of $47,000 – so we’re close to $50,000,” Irmer said. Remember, this is a car from a range with a starting price of just $22,990 plus on-roads, and the RS model is $41,490 as a manual.
Irmer said that the larger Superb also has a model mix that sees buyers spend up on the higher-spec versions, rather than go for the more affordable models in the range.
“In the Superb range – it sells predominantly in the mid-$50,000s, with the 206TSI which is about 20 per cent of the mix. They’re going across the $60,000s.”
All this leads us to the question of where the ceiling is – at what point with potential buyers scoff at the idea of a Skoda at a certain price point. Irmer admitted he doesn’t know - yet.
“Where is the ceiling? Would you have thought that – when you look at it that way, probably not. But it is the reality. Give it a bit of time: we are less than 10 years in this market, and we’re still defining the product image in many customers’ minds.
“There are people around who don’t know where we come from, or what cars we have. That is the reality in the majority of people and I think these things take a little time,” he said.
The ceiling could well shift when the brand introduces the new Kodiaq SUV here. Irmer confirmed it will start in the mid-$40,000s, but the brand has evidence that buyers are happily spending $55,000 on seven-seat SUVs in the broader market context.
It seems entirely probable that a high-spec Kodiaq could push towards $60,000 before on-road costs, and it wouldn’t be Robinson Crusoe there: seven-seaters such as the Mazda CX-9, Toyota Kluger, Hyundai Santa Fe, Ford Everest and Nissan Pathfinder all top out close to $70,000.
Skoda Australia general manager of corporate communications Paul Pottinger said that our market is unique for the Volkswagen-owned Czech brand.
“The dynamic for Skoda in Australia is different to the rest of the world – it’s absolutely atypical here, and it’s being driven up by the buyers. It was originally introduced as a Volkswagen budget brand, but the market begs to differ,” Pottinger said.
“We couldn’t sell any entry-level Octavias – it essentially doesn’t exist any more, without packs and without options.”
Irmer said that the brand is working with a different mindset here than in other markets.
“In the entry cars, the smaller cars in the line-up, to have an entry price point is more important than the cars further up in the range. That’s something we have learned that we have adapted to,” Irmer said.
“More car for you money – that is really what nails it down. It’s not a car for less, it’s more car for you money. In Australia it works for us really well,” he said.