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Skoda brand has been developed around SAIC-Volkswagen brand in China for many years and is regarded as a "cheap Volkswagen". However, with the decline of the brand and declining sales, Skoda has a growing desire to develop independently. Recently, SAIC Skoda brand positioning has declined, and the official guidance price for all its models has been cut, which is the first car company to announce an official reduction this year. From the official point of view, it means that Skoda brand will lose the label of "cheap version" of Volkswagen and develop independently.

Jia Mingdysi, general manager of SAIC Volkswagen Automobile sales Co., Ltd., said, "once we ignored the development of Skoda brand characteristics, and some pursued the growth of volume. At that time, we were more pursuing how the product itself is larger than Volkswagen brand products." how to have a higher performance-to-price ratio, making customers feel that it is a big and cheap Volkswagen. This approach is good for Skoda brand sales, but it will also create a burden on the brand. " Therefore, within SAIC-Volkswagen, the first thing to solve is how to achieve the distinction between Volkswagen and Skoda.

As for the decline in pricing, Jia said: "in the past, there was a large gap between Skoda's suggested retail price and the end-of-market discount, and the higher suggested retail price caused customers to make an initial choice. Skoda brand will not be taken into consideration." The reduction of the suggested retail price will help it to better approach the target users, but also out of medium-and long-term plans and considerations.

In fact, in the past few years, the Chinese automobile market has changed from rapid growth to the era of stock competition, the days of joint venture brands lying around making money are gone forever, and Skoda's label of relying on cheap Volkswagen no longer meets the expectations of the market and consumers. As a result, Skoda has gradually fallen into a marginalized joint venture brand. With the defeat of Changan Suzuki, Dongfeng Renault and Fiat, Skoda brand was given a serious warning. Therefore, the brand returns to reality, and the adjustment of positioning, price and marketing mode is imperative, otherwise it will face the fate of elimination.

Skoda has been in China for 15 years and has been hovering in sales of 300000 vehicles in recent years. Under the impact of the falling price of Volkswagen brand models and Japanese and Korean competitors, the sense of existence of Skoda brand is getting lower and lower, especially after the launch of Cormick and Coloke SUV, it has not brought significant growth to Skoda brand sales. Skoda sold 282000 vehicles in China in 2019, down 17% from a year earlier, according to data. Skoda had previously set an annual sales target of 500000 vehicles.

Through the decline of the guiding price, the downgrade of market positioning and the change of marketing promotion, SAIC Skoda wants to seek brand revival, which is also adjusted under market pressure. But now China's auto market is facing a continuous decline in sales, brand merger and restructuring period, Skoda's adjustment will bring greater challenges.

According to official news, all models of the nine major cars under the SAIC Skoda brand have been reduced in guidance prices, with the latest suggested retail prices ranging from 77900 yuan to 247900 yuan, with a maximum drop of 24500 yuan. Among them, the Kodiak guidance price was adjusted to 17.79-247900 yuan, a drop of 1.05-24500 yuan, a drop of 15.49-229900 yuan, a decline of 1.0-15000 yuan, and a drop of 11500 yuan, and so on. SAIC Volkswagen Skoda is the first car company to announce an official downgrade this year.

"price reduction and survival" is an important measure for SAIC-Volkswagen brand to enter 2020, after Dongfeng Renault announced its dissolution and delisting. As the car market enters a period of brand adjustment and integration, more and more brands will make choices.

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