The aggressive pricing policies pursued by Chinese automakers, particularly in the electric vehicle market, are shifting the balance of power in the global automotive industry. Western companies are reacting to this situation and are opening up discussions about the consequences of price competition. Skoda is the latest company to join the debate. The company highlights the falling price tags of its Chinese competitors, claiming that quality is being overlooked.
Skoda Targets Chinese Brands
Kieran Merrigan, Skoda’s Australian CEO, raised this issue during the launch of its new SUV, the Elroq. Merrigan said, “If I’m going to drive a vehicle safely with my family and friends, I want it to have undergone extensive R&D. Rushed models can be overlooked. Ultimately, you get what you pay for.”
These remarks allege that R&D and quality are being compromised in order to lower prices. Skoda acknowledges that it cannot directly compete with its Chinese competitors on price. This is particularly evident in the Australian market.
More than 1,400 BYD Sealion 7 models were sold in July, almost five times Skoda’s total sales for the same period. Against this backdrop, Skoda is focusing on quality and engineering over price.
As part of this strategy, the new Elroq is being promoted as “an affordable yet reliable option with European engineering and a 130-year brand heritage.” Priced from $54,990 in Australia, the Elroq comes with a seven-year warranty and an eight-year/160,000-kilometer battery life.
Following the Elroq, Skoda announced that it will launch the more affordable small SUV Epiq and the seven-seat Vision 7S by 2027. In these models, the company is emphasizing quality, engineering, and reliability over its price-focused Chinese competitors.
However, the overall trend and user preferences in the electric car market call into question the success of Skoda’s strategy. Sales figures released in July also support this assumption.
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