Skoda is all geared up to pull out Fabia from the Indian market. Fabia was the only hatchback offered by the company in India. However, Skoda is yet to finish the assembling to the Fabia and clear the inventory. So, it is expected that Fabia will remain on sale until its stocks are exhausted which may be by the end of this year.
Skoda’s decision to stop Fabia comes in lure of the huge loss company has been witnessing over Fabia. Regular price cuts over the year on Fabia have forced company to cut its price almost by 40 percent of its original price in 2008. This price reduction has badly affected the margin on the vehicle. Fabia with very little local component was quite costly to produce and the problem was amplified with the declination of the value of Indian rupee by 36 percent since 2008, which uplifted the cost. According to the sources company was losing as much as about Rs. 1.5 lakh per car, which restricted the company from taking any aggressive marketing strategy for Fabia. Fabia was sold only 3,343 units in the fiscal year 2012-13. Last month Skoda sold only 115 units. Earlier this year Honda too refrain Jazz from production as it was becoming too costly to produce and the sales were not adequate.
Skoda is likely to re-launch Fabia before the end of 2015 but company has not made it clear if the new vehicle will be the modified version of the existing one or it will be an all new Fabia that is also due for an international launch for next year. However, in lure of the low demand of the Fabia in Indian market all the plans for re-launching of Fabia in Indian market has been put on hold for sometime.
The decision to discontinue the loss recurring Fabia will now help Skoda to focus mainly on the current product and the launch of new products in Indian market. Skoda is riding with high hopes on its new Octavia that company believes will become the segment leader once it is released in August this year. According to one of the company officials Skoda will now concentrate its resources on brand building and network expansion rather than on loss making Fabia.