Mumbai: German automaker Volkswagen''s group company, Skoda Auto will launch the new Octavia by the end of 2005. The new Octavia is an all-new car based on a totally different platform while the company is planning to continue with the old Octavia after the new version is launched. According to Imran Hassen, managing director, Skoda Auto India, "We will not phase out the current Octavia, we will sell both alongside," he said. For the first time in India, a carmaker will attempt to sell an older model alongside its latest offering. The reason for this is that the two cars are based on entirely different platforms. The new Octavia launched in Europe two months ago is based on the Volkswagen A5 platform while the model being sold in India at present is based on the A4 platform. Skoda Octavia is facing tough competition from the Toyota Corolla and GM Optra and the German carmaker expects to sell 8,000 cars in India this year and has set a target of selling 25,000 per year in three years.

Hassen said the company has set a steep target to achieve break-even. He said to achieve this target the company would have to have a focused entry plan into the C segment and the new Octavia was part of the focus on the C segment.

Skoda''s plant in Aurangabad has the capacity to assemble 15,000 vehicles at present and major capacity expansion plans are underway as Skoda rides towards its 25,000 cars per year target, said Hassen. Incidentally this is also Skoda Auto''s only plant outside Europe.

The company has also set up its first R&D centre outside its home country, in India according to Hassen. Skoda Auto India posted a turnover of around Rs700 crore last year, expects to register revenues of Rs800 crore in the current year. The Czech parent has chalked out a seven-year plan, starting 1999, to invest $56 million in India. Skoda has sold around 13,000 units of the Octavia, Superb and L&K since 2001. Skoda had already invested €100 million ($119 million) in India on operations besides marketing since entering in 2001, Hassen said.

"The Indian market for Skoda is of very high importance," he said. "The intention of Skoda is, first of all, to stabilise the Indian market. After stabilisation, to use the Indian market as a base to deal with the markets in the region." Hassen also said that after selling 25,000 units, the company would address the mass market, andadded that Skoda would launch a technology "not seen in India."