Skoda Repositioning: A Confrontation Between The North And The South?

Skoda's "official drop" came just in time.

Last week, at an online media conference, SAIC FAW-Volkswagen Automobile Co (hereinafter referred to as "SAIC Volkswagen"), Skoda's brand new marketing director, Lin Yuan Hang announced that Skoda would adjust the market guidance price of the whole vehicle model, with a maximum adjustment of 24 thousand and 500 yuan.

This is the first brand to declare "official drop" this year. When the epidemic is swept over, Skoda will lower the manufacturer's guidance price and reduce the pressure of dealers to a certain extent. Behind the "official drop", Skoda is actually repositioning its brand in China.

In the small media interview after the communication conference, Jia Mingdi, general manager of SAIC Volkswagen sales and marketing executive and general manager of SAIC Volkswagen Automotive Sales Co., Ltd., said that the "official drop" is for long-term consideration, so that Skoda can compete with the "right competitors".

As a sub brand of Volkswagen Group, Skoda and Volkswagen brand are highly shared in production and technology. This has become the advantage of Skoda in opening up the Chinese market. But in the long run, Skoda itself has become a "cheap version of the public", and its brand positioning is vague. More importantly, with the expansion of the mass brand itself, the price of Skoda products coincides with that of the market.

After the adjustment of market guidance price, Skoda will have an obvious distinction from the public brand, which is a smart bet for SAIC Volkswagen. But for Skoda, it's an adventure. A car industry analyst told the twenty-first Century economic news reporter that Skoda needs a clearer brand positioning. If there are no supporting marketing activities and market recognition, the current "official drop" will only strengthen the stereotype of the cheap version of the public.

This concern is not without reason. In fact, many people are used to comparing the newly established brand of Jetta with Skoda. Skoda's official decline has also been interpreted by some media as a challenge to Jetta. Despite the fact that Skoda and Jetta are different from brand positioning and product prices, the "cheap version of the public" may become more and more people's common understanding of the two.

Counter chips?

After the whole department "official drop", Skoda became a more popular brand, and Jetta became a topic that could not be turned around.

Skoda has been in China for more than ten years. The Jetta brand has been independent for less than a year. There are significant differences between the two sides in terms of products and pricing. However, after the official decline, the entry price of Skoda models has been as low as 77 thousand and 900 yuan, and according to public information, the Jetta entry price is 65 thousand and 800 yuan.

Jetta and Skoda belong to the Volkswagen Group's brand, positioning is relatively low, compared with the popular brand products, these two brands have obvious price advantage, and with Volkswagen Group has a lot of technology sharing, in the terminal market has also adopted a similar marketing strategy.

However, after the independence of the Jetta brand, its performance exceeded expectations, to a certain extent, it threatened Skoda's original status. Data show that in 2019, Jetta brand sales amounted to 43 thousand vehicles, with an average monthly sales volume of about 10 thousand vehicles, while Skoda's sales volume dropped to 282 thousand in 2019, after a few years of stagnation of about 300 thousand vehicles, down 17% from the same period last year.

Although there is no evidence that Jetta has snatch some customers from Skoda, as an independent brand, Jetta has already shown its impact. Against this background, Skoda announces "official drop", and it is inevitable that there is suspicion of PK with Jetta.

However, the above statement was denied by Jia Mingdi. He said that from the aspect of product quality and driving experience, Skoda and Jetta face two kinds of customers, and emphasize that Jetta has a low degree of conversion to users who really like Skoda or Skoda brand recognition.

The mission of Jetta brand is to get a share in the local brand market, that is to say, the market of 36%~38%'s own brand can get in, but Skoda must not be able to get in because of the price difference of 25%~30%. Jia Mingdi said.

How to locate Skoda, especially after the price of its products has been lowered again? Jia Mingdi pointed out that the benchmarking partners are modern, Ford, Nissan and other second-line joint venture brands, while SAIC Volkswagen's main brand Volkswagen continues to compete with mainstream joint venture brands such as TOYOTA. After recombing Skoda's price system, SAIC hopes to form a complementary relationship between the two brands within the company and remove the previous Skoda's "grab" share of the public.

In the SAIC Volkswagen, Skoda is obviously a relatively low end brand. After this "official drop", it is even more, but Jia Mingdi does not quite agree with this statement. "Can not simply say who is high-end, who is low-end." Jia Mingdi said, "we have been discussing with Skoda headquarters in Europe whether we need to completely match the brand positioning, or to make some brand positioning adjustment according to the market characteristics. In China, the public is oriented towards the mass market, while Skoda aims at niche personalization market.

"Not the low end" embarrassment

? ? ? A consulting company automobile business leader told our reporter that Skoda's "official drop" is mainly the competitiveness of price segment. Before Skoda, the brand premium of brand definition is higher than that of its own brand, and lower than that of the mainstream joint venture brand. However, considering that the joint venture brand is being explored as a whole, its own brand is also brand by new energy vehicle and high-end brand. Upward, leading to Skoda's middle positioning is embarrassing.

However, this "official drop" can not completely resolve this embarrassment, but on the other hand, it has added a heavy embarrassment to Skoda. As the brand of Volkswagen Group, Skoda's positioning adjustment is not thorough, while it is not willing to admit that it is a "low end" brand on the other hand, it is still uncertain about its positioning.

This is because Jetta is the first to launch, and its pricing has been pre emptive into the field of independent brand. Skoda must make a difference with it and exert its limited space. On the other hand, it is because Skoda's own brand accumulation makes it impossible to explore the same end as Jetta.

SAIC's executives have been aware of this embarrassment. Therefore, Jia is not willing to talk about "low end", but rather reluctant to talk about "cheap version of the public", but tries to find a suitable place between Jetta and Volkswagen brands.

"Once we neglected the development of brand characteristics, some of the pursuit of growth, then consider more, how much larger than the public brand products, cost-effective, let the customer think this is a big and cheap public. This is good for Skoda's sales promotion, but it will also have a burden on the brand. " He said, "how to abandon the burden and let Skoda brand go forward is the mission and challenge we are facing at present."

In the view of Jia Ming Di, Skoda has the characteristics of Europe (brand), and can form a more striking impact. Skoda's original intention is to make a product that embodies individuality, but also has high quality.

SAIC Volkswagen is trying to reshape Skoda's brand image. "Later, we will spend more energy on brand positioning itself, passing on its European lineage and German character." Jia Mingdi said that it would take advantage of the 125th Anniversary chance of the birth of the brand to carry out a series of dissemination, such as the activities of "125 reasons for loving Skoda" to publicize its blood quality, brand characteristics and positioning.

It is reported that Skoda and Volkswagen's two brands will do a larger division in the future. Volkswagen brand will further enhance brand influence through events of more scale effect. Skoda focuses on highlighting brand characteristics, choosing more specific, personalized and niche interest points to enhance brand impact on customers and promote "more accurate grasp and tighter grasp".

But finding accurate and sustainable brand positioning is not easy. In fact, in the past more than 10 years, after Skoda made in China, brand positioning has always been a lingering topic. From the beginning of the middle and high-end, focus on the elite, to the positioning of the family in the late stage, to the campaign, and now to "younger", Skoda has been groping, but it seems that it has always been pointless.

This is related to the numerous and complicated market structure of domestic automobile brands. Jia Mingdi has no choice but to say that Skoda's position in China has always been discussed with European headquarters. In fact, Skoda's brand positioning in Europe is very clear, but China's market environment is complex, not only to face competition from the masses, TOYOTA, general motors, but also to compete with its own brand. Now the two brands are squeezed, and the brands that can survive in the middle will face greater pressure.

In the narrow market space, Skoda's positioning is indeed a test of SAIC Volkswagen and Skoda's team.

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