The recent budget session announcement to increase the custom duties on CKD and imported cars has started to affect foreign carmakers. Czech brand Skoda has announced an increase in prices across its product range in India, from March 2018.

However, Skoda has decided not to transfer the full burden on the car buyers, at least initially. To this end, it has chosen a multi-step method to implement the price hike. Initially, prices will be up by 1 percent, which will translate to an increase ranging from Rs 10,000 to Rs 35,000 across its model line-up. Later in the year, the price increase can go up to 4 percent – which could be as high as Rs 1.5 lakh.

Skoda Auto has a localisation level of 55 percent, on an average, across their model range. The company imports engines and gearboxes that are assembled in Skoda cars at its assembling plant in Aurangabad, Maharashtra. Skoda has, however, been trying to increase the local content usage to over 60 percent in order to achieve a 5 percent market share from its current 2 percent.

The Aurangabad plant has a production capacity of 40,000 units. It rolls out models like the Octavia, Superb and Kodiaq. Rapid, Skoda's entry-level model, rolls out of the Pune-based plant of its parent company, Volkswagen.