Skoda has just entered the hotly-contested sub-compact SUV segment with the new Kylaq, a third model based on the localised MQB-A0-IN platform. With a starting price of Rs 7.89 lakh (ex-showroom), the Kylaq is at par with the competition, and thanks to tax benefits, there’s also a significant delta with its elder sibling, the Kushaq. Given that the Kylaq shares most of its componentry with the Kushaq, including the platform, powertrain options, tech and features, the former is positioned as a better value offering, which, no doubt, will draw buyers away from its larger sibling.
Speaking to Autocar India on the sidelines of the launch, Petr Janeba, Skoda India brand director, acknowledges this by saying, “There can be some downgraders from the Kuhsaq. Someone who does not need the space and is more price sensitive will go for the Kylaq because the rest of the technology and package is are all there.”
Kylaq will add to scale, lower costs
The Kylaq cannibalising on Kushaq’s sales, however, is only a win-win situation for the brand, as Janeba explains, “Giving customers the technology and features from a higher segment is a win for them. For the brand, the win is that we increase our scale as its shares the platform with the Kushaq and we are also able to localise deeper. This not only allows us to reach a more competitive cost level, but also give customers a better value proposition in terms of cost of ownership.” He adds, “It is an economic rule, that within the brand, you have the biggest cannibalisation.”
With nearly a dozen offerings in the sub-4m SUV space, competition is rather fierce in this segment. It is also particularly difficult to have high profit margins because of the price sensitivity of this category. However, given the sheer volume, Skoda is confident there’s potential to grow even further, particularly with buyers wanting to upgrade from the hatchback segment (think Skoda Fabia/VW Polo owners).
“I believe, with this car we can even grow the segment, not only because we bring some buyers from the higher segment, but there will also be buyers who have always wanted a Skoda, but didn’t have a product in this category,” says Janeba. “We will not only steal some buyers from our competitors, but there will also be some upgraders from the hatchback category, as well as some downgraders.”
Kushaq facelift due in 2025 to further set it apart
That said, sales of the Kushaq itself has been below expectations and with the Kylaq set to further eat into those numbers, it will be important to create a better value proposition for the Kushaq. This will also be crucial for Skoda in achieving the targeted 1,00,000 annual sales by 2026.
So, to keep the it relevant and up to date, Janeba has confirmed that a Kushaq facelift is due in 2025. “The Kushaq will get a mid-lifecycle update next year, and there will be continuous development in order to create a different value proposition.”
Plus, the carmaker is keen to differentiate both models on the ownership front. “There are a lot of things which the Kushaq has that the Kylaq does not, or has it differently. We will try to create a different value proposition with things like the warranty and cost of ownership. So, there are things we can adjust to create a differentiation,” said Janeba.
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Skoda Kylaq variants, features explained
