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  Skoda finally has a plan that could work in Australia - the value starter Fabia hatch.

Czech brand, Skoda, finally looks to be getting serious about Australia with the well-priced small car it has needed for a local breakthrough.

The facelifted Fabia hatch unveiled at the Geneva motor show is now firmly in contention thanks to more favourable exchange rates that should bring a sub-$20,000 starting price.

Until now, and despite coming from the Czech republic, the Fabia would have been a $25,000-plus car and that would have priced it well above the baby Polo and close to the Golf which come from the same Volkswagen Group product pen. And that means it would have been well beyond the reach for budget-conscious Australian buyers.

But Skoda is finally getting a Fabia plan that could work, building it around the hot RS model which starred for the brand in Geneva and pushing hard for a value starter car. “There’s still some way to go but clearly the RS would make a great halo car. It’s high on our wish list," says the head of Skoda in Australia, Matthew Wiesner. He says the success of the company’s existing performance flagships, the Octavia RS sedan and wagon, means there is a ready fit for the Fabia RS, which is also available as a hatch and wagon. “It would be in good company,” he says.

The go-faster Fabia RS gets a Volkswagen-developed turbocharged 1.4-litre TSI engine that develops 132kW/250Nm. So the Fabia will hit 100km/h in 7.3 seconds and has a top speed of 224km/h. Like Volkswagen's Polo GTi, the RS also gets a seven-speed DSG gearbox with paddle shifters. Wiesner says Skoda Australia has been trying to make the numbers work for the Fabia for 18 months but Czech costs and unfavourable exchanges rates have been a problem.

The Fabia is the car always needed for Skoda in Australia, as the quirky Roomster has struggled for sales and the Octavia and full-sized Superb (both very good cars), have not been able to draw the youthful converts needed to give the brand any real traction. “If you look at the areas we’ve launched in, we’ve had to battle into very traditional conservative segments. We’ve effectively been the Octavia car company but that’s changing and we’re seeing that with the Superb," Wiesner says.

If the Fabia does get the green light, it is likely to sit at the top of the light-car segment and go head-to-head with its Volkswagen Group cousin, the Polo. It too, has recently been updated, but with a complete overhaul that should give it a much better bottom line for Australia. Apart from the Fabia, Wiesner says the Yeti soft-roader remains Skoda's main new-model priority. The high-rider wagon was unveiled last year at the Paris Motor Show.

“The whole focus has been on Yeti, and from a brand volume and dealer perspective it has probably been more important than the Fabia,” Wiesner says. “The compact SUV segment is continuing to get stronger, which makes the Yeti very important for us. I think that once we’ve got a full complement of Yeti derivatives it will have a far greater impact than the Octavia." The Yeti is a Volkswagen Tiguan sized off-roader and set to arrive by the end of the year, when it will be available in both front and all-wheel drive with diesel and petrol engines.