Long-term perspective on tax structure to aid product development: Skoda

A long-term perspective on tax structure for different automotive technologies in India would aid the industry in product development which takes a lot of time and investment, according to Skoda Auto India Volkswagen MD and CEO Piyush Arora.

Skoda Auto Volkswagen India Pvt Ltd (SAVWIPL) oversees the India operations of five Volkswagen Group brands - Skoda, Volkswagen, Audi, Porsche and Lamborghini.

In an interaction with PTI, Arora said the government is taking steps in terms of both demand creation and tax structure standpoints to promote electric mobility.

"From our point of view, a long-term vision on how the tax structures would be there for different technologies would be helpful for the industry because product development cycles are extremely long and there is also high amount of investment which goes into it. So if we have a longer perspective in terms of duties it would help," he stated.

He was replying to a query regarding the industry wishlist in the upcoming Union Budget.

Terming the Indian market as strategically important, Arora said the automaker is extremely focused on tapping the growth opportunities.

He noted that the group will consider all measures, including collaboration with a local partner, to cater to diverse customer requirements in the market.

"India being a strategic market, we for sure look at different opportunities like we do anywhere else in the world...having a partner who shares resources or we do it in a way that we are able to bring in more products," Arora said.

He further said: "Focus for us is that we have to cater to this market from the customer point of view, bringing more products and the best suited way to do it."  Last year, Skoda Auto Chairman of the Board of Management Klaus Zellmer stated that the group is looking to collaborate with an Indian partner in order to grow its presence in the country.

Various media reports have linked the company to Indian groups such as Mahindra and JSW but these have not been officially confirmed.

"We have had more than two and half decades of presence in the country having developed a complete ecosystem here. We have invested a lot to bring innovative products catering to customer requirements. And if there are opportunities which will make it a win win situation.. I am sure that all partnerships are successful based on that," Arora said.

He noted that the group would like to participate in the electric vehicle segment as well with the sector penetration expected to reach 15-25 per cent by the end of the decade.

Arora said that with compact SUV Kylaq, Skoda would be able to enhance its customer reach and thus bolster its market share as well.

"Almost 30 per cent of 4 million plus cars (in India) get sold in this segment. So this is our efforts to get into and democratise the European technology for the Indian customers and also increase our market share," he stated.

Earlier, the brand was able to address only 30-40 per cent of the Indian passenger vehicle segment limiting its market share, Arora said.

"Kylaq gives us an opportunity to expand market reach to almost 60 per cent of the addressable market. So from that point of view we are definitely looking at achieving more market share," he said.

When asked about exports, Arora said the group is exploring more opportunities.

"This year we will also commence export of parts and component car kits to Vietnam. We have a partner in Vietnam who will then assemble and produce the cars (Kushaq and Slavia). This is new line of business," he added.

The company has set up a new parts centre in the Pune plant which will cater to to this initiative, he said.