By on February 22, 2010

After decades of “up-positioning” and premium-branding, the sudden success of cheapskate models such as the Dacia Logan has not gone unnoticed at Europe’s largest automaker Volkswagen. Czech media is abuzz with reports of a new entry model, blatantly codenamed “A Entry,” which may be part of the Skoda line-up.

Reuters cites Czech media reports that the new model could be priced around $13,650, putting it somewhere between Skoda’s smaller (Polo-based) Fabia and the larger Octavia, which sits on a PQ35 (think Golf, Jetta) platform. Priced and positioned like that, it won’t be a Logan-killer. The Dacia goes for under $10,000 MSRP.

In the meantime, rumors that VW aims a lot lower won’t die in Wolfsburg.

There is ample chitchat that VW and Suzuki are working together on something small and cheap. Volkswagen is on record, for instance in Germany’s Rheinische Post, that “there are currently no plans for a car that counters the Nano.” Weasel words like “currently” and “no plans” send smoke signals that something is cooking.

After decades of conspicuous consumption, full frontal frugality is the new-fangled fashion in Europe. For years, Mediamarkt, a chain for low priced electronics, had the slogan “Geiz ist geil.” Directly translated, it would come out as “stinginess is horny.” A more fitting rendition would be “It’s cool to be cheap.”  Ladies, who formerly flashed their Gucci and Prada possessions, now proudly shop H&M. There even is a chain of – fully legal – discount bordellos in Germany, called “Geizhaus.” (Their slogan is “Geiz macht geil.” The translation “stinginess makes horny” is absolutely appropriate, even if it lacks scientific proof.)

Coming back to cars, frugal vehicles are all the rage. Powered by the “Abwrackprämie,” sales of small&cheap rocketed up by nearly 100 percent in Germany last year. Small&cheap is also important to penetrate emerging markets. In the Volkswagen portfolio, launching a Geizauto under the Skoda brand would be a logical choice. Forget the “peoples’ car.” The Czech brand, bought by Volkswagen in 1991, has become the choice of “smart shoppers” in Europe and elsewhere. They know there is a Volkswagen underneath. But they usually find more value for less money in a Skoda. According to Reuters, “Skoda sold a record 684,226 cars last year, helped by car scrapping subsidies in western markets like Germany and expansion in China.”

(PS: Note that in the article above, I rejected the offerings of my synonym dictionary, and did not use “niggardly,” such as not to offend the hair-trigger sensitivities of some not so well advised readers. Julian Bond, chairman of the NAACP during the niggardly controversy, said: “You hate to think you have to censor your language to meet other people’s lack of understanding.” As much as I hate it, I will. Having said that, anyone who accuses – without due, and carefully considered cause – writers or commentators of TTAC of racism, or who incites an on-line racial riot, will be banned without warning. It happened last night. Let it not happen again.)

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9 Comments on “Skoda To Come Out With Cheap Skates?...”

  • avatar

    Just checking-in to see if I was banned yet.. if this posts, then who was our latest flame-out?

    Was just musing: Is anti-Toyotaese grounds for being banned? Toyota is something like a country or a race, huge-GDP, unique culture and language, leaders and troops, etc. (I’m not really anti-T, and have had a lot of respect for them, but despite my many critiques and analysis, I’ve tried to be professional and fair.)

    Oh, and to get back to topic … over the past couple of years, VW has been on and off and on-again re. a global entry level vehicle … the scope of the program has waxed and waned over time, and then was put on hold due to cost and profitability issues but reports are that it is back on again…

  • avatar

    OK … I’m going totally off-topic here. I love the artwork of R. Crumb. In fact, I still have that album cover in vinyl so I can admire it. And, if you are a real fan of Crumb, be sure to check out his newest book “The Book of Genesis Illustrated “. It is an absolute marvel!!!!

  • avatar

    Paired with Suzuki it will be interesting what VW comes up with. It’d be great if VW starts a whole new class in Europe with Suzuki’s Kei class cars. 600cc for 5000 Euros certainly sounds like it might have legs. Whether Suzuki can design something that small that passes ENCAP and have VW be able to build it profitably in the European market is another thing. Mercedes/Smart has shown that small doesn’t mean cheap or profitable.

  • avatar
    fred schumacher

    The auto press has really missed this trend toward cheap cars. It was very clearly present during the German scrapping bonus program, where it was Daihatsu that sold the most cars, as I remember. Here in the U.S., it’s Hyundai that has been the big winner, primarily because they provide the cheapest cars in each vehicle category.

    This is all a result of the financial meltdown and consumers’ fears of going into more debt. Any auto manufacturers not tracking this trend are going to be in deep trouble. The days of easily marketing a $24,000 family sedan are over.

    Real incomes have been stagnant since the 1970s. Families compensated by working more hours, more jobs (women now outnumber men in the workforce), and going into more debt. The fact that luxury cars made up 20% of sales before the meltdown showed a willingness to go into debt, since 20% of people did not have real incomes to buy luxury cars.

    The car of the future is the cheap car.

    • 0 avatar
      Martin Schwoerer

      Hi Fred,
      you are right, with an exception: TTAC didn’t miss the trend towards cheap cars.

  • avatar
    Dr Strangelove

    Is this new Skoda going to be the platform mate of the ‘new midsize sedan’ announced for America?

  • avatar

    Is not only because a VW is beneath the “skin” of a Sköda car… it’s because the thing is also good looking.

    I wouldn’t mind to buy this . The case would be even better if it has a TSI or 1.8T engine under the hood. Or TDi…

    And the Superb also looks good.

    And I’ve read that Sköda cars are better assembled and have less problems that VW own cars.

    The Logan is FUGLY. The Sandero looks ok.

  • avatar

    I too wonder where the cheap cars thing will go. I’ll accept it from the entry level brands of various manufactures but for the love of god GM, don’t try to build a $10K Buick.

    I myself am torn between the idea of a Hyundai Accent/Kia Rio type car “brand new” for basic commuter transportation or a used car that is larger, older, and more luxurious for my commute.

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