The real reason why the new Skoda Fabia costs so much

While everybody seems to be shocked and confused by the news that the latest-gen Skoda Fabia now costs about $20,000 more than before, the brand's director has revealed to CarsGuide the real reasons why he made the brand's tiniest car so expensive, and hinted that more affordable Fabias could follow.

At the start of this year, the entry price into a Skoda Fabia was $18,390 before on-road costs, now the all-new Fabia has arrived in only one grade - the Monte Carlo Edition 150 - and is asking $37,990 driveaway.

Just to put that in perspective you could buy a larger Skoda such as the Kamiq SUV or even Octavia wagon for less money.

Even the Volkswagen Polo, which shares the same underpinnings as its Fabia cousin (both being part of the Volkswagen Group), begins at a list price a bit over $25K.

So what's going on?

Speaking to CarsGuide at the Australian reveal of the new-generation Fabia, Skoda Australia brand director Michael Irmer said the reason was based on only being able to secure 600 new Fabias due to supply constraints, and it was his choice about which ones to bring in.

"We could have 600 only, and we could either have 600 cars with hubcaps or 600 which look totally slick," he said.

As far as Fabias go, they don't come much slicker than the Monte Carlo Edition 150 with its 18-inch Black Libra alloys wheels, gloss-black grille, roof top spoiler and rear diffuser.

But you might think that for a car so small a buyer might be looking for something more affordable such as the previous entry-grade Fabia with hubcaps.

Mr Irmer justified the price of the Monte Carlo Edition 150 saying it was good value with an extensive features list, and explained that the decision to bring in a highly-specified version of the Fabia was part of Skoda's wider strategy, which he said has been proven to work on other models.

"Skoda has a different clientele than normal," Mr Irmer said.

"It takes a different person to buy something which is not common, which not everybody else has. We call them independent thinkers. They also have fairly high incomes and extremely high education levels. This demographic wants something else. They actually have the money for a big badge, they just think it's smarter to go for a Skoda and they want the full kit. They want to have all the goodies but they don't want to be seen as a show off."

Mr Irmer points out that the response to the RS version of the Kodiaq large SUV in 2020 showed that buyers wanted highly specified cars.

"The RS is now our most sold Kodiaq version. So we decided to try this out with the other segments and we did this with Scala and Kamiq with the Signature editions - and these turned into the most sold variants," he said.

"So when Fabia came out, we wondered if it was a different beast and that it being an entry segment car might mean we shouldn't do it? But then we were confronted with the news that for the foreseeable 12 months we were only going to get roughly 600 units. We know that the potential for the car is around 3000-4000 cars a year. So we thought when we only have 600 cars why don't we try the thing that worked in the other segments as well?

"And then later on when we have more volume we can then look at whether we want to introduce something more affordable. That's why we introduce the Monte Carlo Edition 150 Edition because it might not last forever.

"It's the right decision. It's the right thing for the brand."

The Skoda Fabia Monte Carlo Edition 150 Edition will launch in August 2022.