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SHANGHAI (AdAgeChina.com) -- Volkswagen Group (VW) is hoping for a bigger slice of China's upscale car market with the launch of Superb, the third model to be sold there by VW's Skoda division.
VW introduced Skoda in China with the Octavia saloon passenger car in 2007, and a Skoda Fabia sub-compact model went on sale in December 2008. All three models are built by Shanghai Volkswagen Auto Co., a joint-venture between VW and Shanghai Automotive Industry Corp. The Shanghai auto company produces other VW models such as Polo, Lavida, Santana, Passat and Touran.
The Superb, or Haorui as the car is known in Chinese, will introduce the Czech-based car brand to an entirely new group of car buyers in the world's largest car market.
While the Octavia is aimed at young families and the Fabia is geared towards 20-something Chinese, the elegant and spacious Superb was designed with the affluent driver in mind.
The Superb is marketed to mid-level managers and entrepreneurs between 35 and 45 in tier one and tier two cities, whose monthly income exceeds RMB 20,000 ($2,928). On sale in China since August 2009, the Superb's sticker price ranges from 179,900 to 250,900 RMB ($26,337-$36,732).
Advertising for the Octavia and the Fabia is done by Grey Group in Shanghai but for the Superb, the German car maker went to DMG Group, an independent agency that handles other VW models as well as VW's corporate branding in the mainland.
With the upscale Superb, Skoda has come a long way from the Czech car maker whose cheap vehicles became a joke even behind the Iron Curtain.
VW bought Skoda in 1981 and pumped money, management expertise and technology into the company, turning it first into a "poor man's Volkswagen," and ultimately into a more stylish brand.
Asian consumers are largely unaware of Skoda's Eastern European heritage.
In China, Skoda has a following among young consumers looking for a solid yet affordable car. Sales grew by 117% in 2008 year-on-year to 59,284 units, helping VW inch closer to its goal of doubling Chinese sales to 2 million units by 2018. Volkswagen sold 652,222 vehicles in China in the first half of 2009, up 22.7% over last year.
When first-quarter sales this year jumped 26% over a year ago to 21,568 units, China overtook Germany as Skoda's biggest market globally. Sales for nearly all small cars have grown this year, after the government lowered taxes as part of its stimulus package to boost domestic spending.
In India, Skoda's other big Asian market, the car is almost positioned as a luxury model. Skoda's sales in that market went up by 31.9% last year, far above its 7.1% global sales increase in 2008, to 16,051 units.
Most affluent business executives in China gravitate towards upscale cars like BMWs that promise status and prestige in their advertising.
To introduce the Superb, Skoda has taken a different approach, said a DMG executive, who asked not to be identified. The model is aimed at executives "with values, who want to impress others but do so through quality rather than by showing off. They are proud of what they have achieved, but they don't want a car that's too showy and they want a balance between work and life."
Skoda is "not exciting," admitted the executive, but "it's a rational car that offers smart solutions that appeal to conservative car buyers in China who are open-minded and open to buying a brand their friends and neighbors may not know."
Features include a Park Assist function that can parallel park a driver's car automatically, and a "TwinDoor" luggage compartment can be opened as either a sedan or a hatchback. It even has a special spot for umbrellas to keep the interior dry. Those touches back up Skoda's tagline in China, "Everything you see has to be possible."