Volkswagen Group’s subsidiary, Skoda, is increasing capacity at its plant in Mlada Boleslav, Czech Republic, to give room for the production of its new vehicle model, a low-cost family sedan that will rival the Dacia Logan of Renault. The company’s subcompact Fabia and compact Octavia are currently produced in the Mlada Boleslav plant.
This endeavor is said to help in the growth of Skoda’s sales in eastern and central European markets, aiding in its target of hitting 1.5 million car sales annually by year 2018, company Chief Executive Office Winfried Vahland disclosed in a statement.
Last year, the VW unit recorded sales of 762,600 vehicles, an increase of 11.5 percent from its figures in 2009. According to reports, Skoda’s new vehicle model will utilize parts from both the Octavia and Fabia, and will be built on a lengthened platform on Fabia.
But even if the model will be positioned as competitor to Renault’s Logan, it is forecasted to be more upscale and expensive, starting at 7,300 euros in Germany. To benefit the most from the increasing sales of low-cost vehicles, Skoda wants to strengthen its product line.
In recent years, the company has been positioning its vehicles more upscale. Furthermore, the company is contemplating on expanding in the future by selling around half of its vehicles outside Europe. Specifically, the company is targeting the emerging markets in Russia, China and India.