If you want a cheaper Skoda, tell them! Here's why the Czech brand won't fight cut-price Chinese rivals such as the MG ZS and Haval Jolion on price alone

Speaking to CarsGuide at the launch of the new Kamiq - one of Skoda's most affordable vehicles - the brand explained why it won't compete in the entry part of the market against Chinese newcomers.

During a presentation, Skoda showed Australian media the pressures the brand was facing from both ends of the price-scale. One was the arrival of more affordable brands from China at the bottom end, while the other was the introduction of battery electrics from mainstream brands at the top end.

Skoda has a plan to introduce its first EV, the Enyaq, before the end of the year, but it seems it still has no plans to bring the price down for its core range of combustion-engined vehicles.

When asked about the brand leaving the affordable end of the market behind, Skoda Head of Product and Marketing Keiran Merrigan said: “I think there’s a certain level we can compete at.

“Offering new cars at used prices with, let’s say, inferior technology and specification is not something our customers expect from us.

“Skoda has a pretty specific customer and they are very well informed. We’ve tried to participate in the entry-level part of the market. We had a competitively priced vehicle in that space, but when you looked at the sales numbers, it wasn’t enough to stay there.”

For context, the entry-point to the Skoda range in Australia is now the $32,990 run-out base Kamiq, although the brand says a base Fabia Select will return for its facelift before the end of the year priced at $31,990 drive-away.

Notably, the previous-gen Fabia small car was once priced at $18,290 (before on-roads) in Australia in automatic form – the manual was even cheaper.

When asked what would make the brand re-consider cheaper cars in such a tumultuous market, Merrigan said “Customers would need to tell us.” adding that it would need to happen at the dealer level en masse, although there were “lots of different ways we collect that feedback.”

When asked if that feedback was growing as the market for mainstream vehicles seems to be getting ever more expensive, Merrigan explained: “Yes, we were getting it a few years ago, but what we’re introducing now is what we like to call ‘anything but entry-level’ cars. They’re well equipped with good technology and convenience features.” He added more affordable versions were available from the factory, but as the market is right now, buyers weren’t asking for them in significant numbers.

“What do we want to stand for? We are European designed and built which means all those good things; engineering and design and we also offer value with an easy ownership piece. We’re happy being an alternative to anything in the market.”

In a bid to better compete with new Chinese players, however, some of Skoda’s key rivals, like Kia, are moving to produce vehicles in China. It's even happening within Volkswagen Group, with Cupra’s upcoming Tavascan to be sourced from a Chinese joint-venture factory.

Would Skoda follow the same path in order to unlock lower prices? According to Merrigan, it’s not being considered.

“Nothing is off the table, but the reality is the cars we’re getting now are out of the European factory. There’s not even a discussion around it. If you look at Kamiq today you can see the value we can get from that factory, and we trust it. It’s the home country, they’re well-built cars, they’re reliable with good packaging, and we offer a seven-year warranty.

“At this stage there’s no need to find better value with our cars, I think we just need to communicate [that value] better.” Other brand features which Skoda says make it unique include a guaranteed future value program, keen financing terms and the seven-year/unlimited-kilometre warranty. It is the first European brand to offer such terms.

While Skoda won’t be introducing more cut-price versions of its cars, it has committed to maintaining its existing entry-points. The facelifted Fabia hatch and Octavia sedan and wagon range, set to arrive in Australia before the end of the year, will maintain or re-introduce their entry-point Select grades.

Additionally, Merrigan said the local Skoda division was in talks to get a more entry-level version of the Enyaq EV.

Skoda sales are down 25.7 per cent this year in Australia, although it is in the midst of a renewal cycle for much of its existing range, which will see its showrooms more fully stocked by 2025.

Aside from the aforementioned facelifted models, the brand is also set to introduce a new-generation Superb sedan and wagon, as well as a new-generation Kodiaq and possibly its Elroq small electric SUV in the next 18 months.