First cracks emerging in SUV market: Skoda

The SUV boom may have reached its high water mark, according to Skoda.

A senior executive from the Czech car-maker has reported the first signs of slowing SUV demand during a flying visit to Australia.

Speaking with media at a briefing in Sydney on Monday, visiting global board member for sales and marketing, Alain Favey, said demand for high-riders has slowed in China after years of prolific growth.

According to Favey, the trend has vindicated Skoda’s commitments to produce a next-generation version of the Octavia mid-size car and its all-new Scala small car.

“When you look at the trend of SUVs going up and up, you feel – and it’s absolutely human to do so – that this trend will continue forever. Today, they are at 56 per cent of global new car sales … but we are seeing the first signs that this is not necessarily the way it will happen,” Favey said.

“The first signs are from the Chinese market. The Chinese market is where the demand for SUVs has been overwhelming, just as you have had in Australia.

“This year, funnily enough, where everyone was expecting a continuation of this trend, the trend has stopped and the Chinese SUV market is no longer growing.

“Actually, there is a revival in demand in China for notchbacks, or sedans. It’s completely irrelevant to the Australian market, and you would be right to think that; it’s just the parallel of the SUV trend at the moment in the world is the same everywhere.

“Is this SUV trend going to continue? Are we going to arrive at a point where the Australian market is 100 per cent SUVS? I don’t believe the SUVs will overwhelm the market.”

Skoda is set to offer four different SUV models in the short- to mid-term: the existing Kodiaq and Karoq, which will be joined by a small new cross-over previewed by the Vision X Concept, and an electric high-rider previewed by the Vision E concept.

“Once we have that, we have a very good coverage of the market, we will have three SUVs with combustion engines and we will have one electric SUV,” Favey said.

“As far as Australia is concerned… we will have very good coverage.”

Skoda is aiming to double its Australian sales in the next five years, and along with SUVs, Favey said the all-new Octavia and Scala electric car were critical to that growth.
“For us there is no doubt that in future there will be a demand for cars like the Octavia, irrespective of what’s happening with SUVs or electric vehicles,” he said.

“There will always be demand for other types of cars. In the future we believe there will be a demand for other types of cars like the Octavia or the Scala. As far as the wagons are concerned, we have a strong position on the wagon market in Australia … and we do think there is still demand for these kinds of cars.”

“A major part of our strategy is to be stronger on the SUV market, but we believe there will be another part of the market, cars like the Scala and Octavia.”