Volkswagen Group’s popular brand Skoda Auto is set to launch in Korea as early as the end of the year, sources said.
The arrival of the Czech brand, once dubbed the “poor man’s Porsche,” is expected to deal a blow to Hyundai Motor that is already suffering from plummeting global sales and the increasing competition from imported cars.
“Volkswagen Korea has been discussing the details recently. This has been classified information among top management for months, but was recently made known to insiders as the company is looking for a brand manager and other staff for Skoda,” a source told The Korea Herald.
“Volkswagen wants to consolidate its market status by having a wider range of cars in the market while it is hot,” the source said.
The exact launch date, the models to be imported and the prices have not been confirmed. But experts assume many of the models will overlap with dominant domestic brands of Hyundai and Kia. Thus, Skoda’s arrival is expected to be another challenge to the nation’s top two automakers.
|Skoda’s flagship compact sedan Octavia|
Hyundai and Kia are losing market share on their home turf. They have together sold less than their first-half target of 4 million units. Hyundai Motor Group chairman Chung Mong-koo ordered them to achieve an ambitious sales goal of 8 million units for 2015.
Skoda has long rivaled Hyundai in Europe as the No. 1 foreign car brand in Germany in 2014, followed by Hyundai and Renault. Although it is under Volkswagen’s wing, it is still considered a Czech brand. A similar trend is seen among other European countries.
They compete pricewise, too. The price of Skoda’s flagship compact sedan Octavia starts from 16,000 euro ($17,700), which is similar to Hyundai’s Elantra with a price tag of 14,500 euro.
Hyundai’s midsize sedan Sonata also overlaps with Skoda’s Superb while the popular hatchback Rapid competes with Hyundai’s Accent and others.
Volkswagen insiders said they hope to lure domestic customers with price competitiveness. “The reason for the introduction of the Skoda is to attract more Korean car buyers to Volkswagen by providing affordable cars. Skoda is the start.”
“This will be a good opportunity for people to experience Volkswagen engine for the price of domestic cars,” the source said.
But some market watchers said it would take time and effort for the Skoda to catch up with Hyundai and Kia, which have a solid customer base and dealer network.
In a previous interview with The Korea Herald, a Volkswagen publicist said Korea is a tough market for foreign carmakers. “Hyundai and Kia cars are famous for providing the most interior space with a limited exterior. The carmakers are also generous with providing various options, which is not common for foreign brands,” he said.