German auto major Volkswagen’s Czech subsidiary Skoda Automobilova has officially announced that it will launch the Octavia in India. Its wholly-owned subsidiary in India, Skoda India, will assemble imported CKD, or ''completely knocked down'' kits of the Octavia at its Aurangabad plant in Maharashtra. It hopes to sell about 3,000 cars a year to start with. The car is slated to be in the Indian market in July 2000.

Skoda is clearly not content with assembling cars in India. It is scouting for original equipment suppliers as well as vendors to supply quality components. It is also in the process of doing an assessment of the Indian market and figuring out how to build a dealer network.

The Octavia will be a diesel car with a price tag of around Rs 9 lakh, positioned at the top of the mid-size luxury car segment. This part of the auto market is already getting crowded, by Indian standards, with the Mitsubishi''s Lancer, Honda''s City, and General Motors'' Opel Astra vying for a share of the relatively small though growing market.

Skoda India plans to begin manufacturing in about three years and get to 50 per cent localisation in another two years. The company has already invested $55 million in India, mainly in the Aurangabad plant.

Depending on the response to Octavia, the company will consider introducing its other high-end models, the Fabia and the Felicia, to the Indian market.

Meanwhile, Skoda’s parent Volkswagen too is mulling a wholly-owned subsidiary in India to make the Volkswagen range of cars. This will be independent of Skoda India. The company has already identified the Passat, which is reportedly a rage in Europe, as the model for India. A top Volkswagen official, confirming the company’s plans, said that the company does enter India, it will do so by bringing in cars in the luxury segment.

Volkswagen has a 71 per cent stake in Skoda. The balance 29 per cent is held by the government of the Czech Republic.