Skoda Octavia cuts price

The Czech branch of the Volkswagen group is still struggling to get established in Australia and the value-added strategy is part of a plan to create more showroom traffic and cut-through in one of the world's most competitive marketplaces.

Skoda has also changed the engine direction on its starter car, trading a turbodiesel for a high-tech petrol-powered Octavia as it cuts the entry level from $29,990 to $26,990.

The new hero for the brand is a 1.8-litre TSI with turbocharging and direct fuel injection. It will also be available with a seven-speed DSG manu-matic gearbox.

"It's simple, it's honest, it drives well," the head of Skoda in Australia, Matthew Weisner, says.

"The Octavia is still a medium-sized car, but with this price we're driving down into the top end of the small-car market. We're pushing down, not driving up."

Weisner admits Skoda has done better with its higher-priced niche cars, particularly the Octavia RS, but needs to convert more customers to create the critical mass essential to success.

He believes the facel-ifted Octavia, which is revealed to the Australian press this week, is the car for the job and sets the direction for the upcoming Superb prestige model.

"The focus is on refinement. The old car wasn't that bad, no it was good, but this is better," Weisner says.

"It's in line with how we're evolving. We're premium, with value. And this lifts us to the next level."

Skoda is actually running against the sales trend after two months of 2009, improving its year-over-year results by about 7.5 per cent when the overall market is down by 15 points.

Even so, Weisner is not about to get into predictions.

"We don't mention targets. You look at volume, yes, but also how the brand is evolving," he says.

"Would we have liked to sell more cars last year? Yes. Definitely. But we had to try a few things, we had to test the market."

"Now we are moving to the next level."