The Volkswagen Group has reportedly signalled its intentions to realign the market positions of its underperforming Skoda and Seat brands.
Speaking with Automotive News Europe this week, Skoda boss Winfried Vahland said the Czech brand will move further upmarket in the hunt for more affluent buyers.
Globally, Skoda sales fell two percent last year to 921,000, leaving the Czech carmaker on track to fall well short of achieving its goal of 1.5 million sales in 2018.
For now, Skoda is positioned below Volkswagen in the company's sometimes confusing heirarchy - but this latest move could see Skoda move to match the VW brand in cost and quality, or even sit between Volkswagen and Audi.
In the push to transform Skoda into a more premium brand, Volkswagen will work to capitalise on the Czech badge's new styling and improved quality to craft a more desireable product.
"Why should Skoda build only practical cars," VW Chief Executive Martin Winterkorn told business paper Reuters this week.
"However, we must ensure precise distinctions are made between the brands, that the brands interact well and that everyone finds their corner."
"We never before expressed passion in our products," Skoda CEO, Winfried Vahland said. "It's like the brand is growing up."
For Seat, an innings in the Chinese market of just 1100 sales in 2013, and an almost continuous flow of red ink since 2005 - marking a total loss of around AU$2.3 billion - will see the brand return its focus to Europe.
Seat sales overall were up 11 percent in 2013 to 355,000, and together, Skoda and Seat accounted for 13 percent of the Volkswagen Group’s 9.7 million sales last year.
The Volkswagen Group previously announced its intentions to become the biggest carmaker in the world by 2018, and it remains to be seen if a rethink for the Seat and Skoda brands will bring that goal closer.
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