22 mar 18

Jan Hurt, Skoda: “Electrification is needed, but so is diesel”

Skoda has been posting solid growth figures, not least thanks to its SUV models. The Czech VW subsidiary  is selling more Kodiaqs and Karoqs than it can build. And there is a third crossover that will join the line-up next year: the one that is heralded by the Genevan concept car Vision X. Fleet Europe spoke to Jan Hurt, Head of Business Development, International Fleet Management and Dealer Network Development, about Skoda’s ambitions and mid-term strategy.

Mr Hurt, in 2017, global sales progressed by 6.6 percent to 1.21 million units. How will Skoda keep on growing?
JH: “It is our ambition to maintain this momentum, basically by doing things the way we are doing them now. We are happy with the results and our customers are satisfied with our services. Our further growth will also come from our geographic expansion into Asia. We strongly believe in the corporate sales potential there, not least in China, our biggest market. But also in Europe we will be focussing on the fleet sales channel, which on average represents 50 percent of all Skoda sales.”

How will your organisation change over the next few years?
JH: “We follow the request of our customers. And they are changing: they attach more and more importance to services than to the car itself. We have to adapt our organisation to this. We strongly believe that the shared economy will play a bigger role than today. However, I don’t think it will lead to a revolution, but rather to an evolution. Over the next years, we will still be doing the same things as the ones we are doing now, but we will slowly adapt to the new customer environment.”

Today, the Octavia is your number one model. Will its place be taken by the Karoq in view of the SUV wave?
JH: “In the European fleet market, the Skoda Octavia was number three in 2017 and number two in January 2018, a position we naturally want to safekeep, but you cannot swim against the tide. SUVs are making their way to more and more companies. The Karoq has had an excellent market launch. Our order book is full for the next months and we are building the car at full capacity. We saw a similar situation with the Kodiaq last year, with people prepared to wait for almost a year. That would not have been imaginable five years ago.”

The Vision X is a preview of a smaller SUV underneath the Karoq. When will we see it in the showrooms and will it have a CNG-hybrid powertrain?
JH: The production version will be ready a year from now. As to the powertrain: CNG plays an important role on some European markets. It can be a perfect alternative to diesel, provided that the infrastructure is there. It also helps us as a manufacturer to lower our average CO2 emissions and meet the EU-imposed target. Regarding the electric part: the Superb will get a plug-in hybrid powertrain next year. Skoda’s first newly developed battery-electric car will come in 2020.”

Do you think today’s emotional debate around diesel will settle down and that it will keep its raison d’être in fleets?
JH: “Not every country in Europe has a negative attitude towards diesel. On some markets, the diesel share is still 90 percent. It is surprising that we have this discussion mainly in the home of the diesel engine. We reckon diesel has a future and we have reason to believe that in some segments, i.e. Octavia or above, many customers will keep on buying diesel, even in five years’ time.”

The facelifted Fabia is no longer available with a diesel engine. Its cousins at VW and SEAT, the Polo and Ibiza, respectively, can still be had with a 1.6 TDI. Why this choice?
JH: “It is mainly driven by the market. Engineering the Fabia’s diesel to comply with the latest emission standards would make the engine too expensive. The extra cost compared to the petrol engines would leave the Fabia diesel with such a price disadvantage that not many customers would buy it. So we took a rational, perhaps safe approach and decided not to invest our money in a re-engineered diesel, but rather in other technologies, such as connectivity and driver assistance systems.

What are the key differentiators for Skoda as a fleet brand?
JH: “People buy Skoda for three main reasons. The first one is that we are stable in what we are doing, taking things step by step, and that we deliver what we promise. This stability is reflected in our residual values, a key factor in controlling TCO. The second reason is image. Skoda has shed its questionable aura from the 1970 and 80s and has become a brand that inspires trust and even prestige in the case of Superb. The third reason is the dedicated fleet customer approach in the different countries. We are one of the few brands that has a fleet customer satisfaction programme. Based on our surveys, we are able to respond directly to our customers’ feedback.”

What do you see as a major challenge for the next years?
JH: “There are many challenges coming our way. The first one is electrification. It is the only way forward to meet emission targets, but it requires a complete transformation, also from a customers' point of view. The second has to do with digitisation. Customers don’t come to the showroom anymore. We have to find new ways to reach out and interact with them.”
Picture copyright: Skoda, 2018

Authored by: Dieter Quartier