The company, part of the Volkswagen group, also ruled out notions that it is scaling down business in India saying it has been consolidating its operations for an overall profitable sustainable business in the country.
"Currently we are in a phase of execution of product development strategy in which we are learning how to lower the cost and increase localisation so that we can compete with Asian rivals but at the same time retain our inherent Skoda quality," Skoda Auto India Chairman and Managing Director Sudhir Rao told PTI.
It is understood that a new Rapid with smaller engine and transmission slated for launch this year will be the first product to emerge from the company's current programme of developing products at lower cost.
"We have taken a conscious decision to focus on value for luxury and not the volume segment. In the short-to-medium term we will be focusing on the mid-sized sedan Rapid segment and above," Rao said, adding, the aim was to achieve a sustainable profitable growth in India.
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Rao, however, did not rule out exiting the volume car segment all together. Skoda has recently phased out its compact car Fabia in the Indian market.
In the segment in which the company is present, Skoda Auto competes with Asian rivals including Honda, Hyundai and Toyota.
"Next year, depending on the results on the new strategies, will see a new phase of products from Skoda stable. By the end of the next year, we would have clarity on products and if the results show that we could come with a sustainable profitable model, then we can even look at segment below Rapid," Rao said.
Apart from the Rapid, Skoda India is also expected to launch a refrehsed version of its sports utility vehicle Yeti by the end of third quarter.
When asked about the sales projections for the current year, Rao said: "This year its going to be a flat year for us as Fabia is out and even the overall industry is still down".