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Skoda holds back investment in India due to "uncertainties"

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New Delhi: A day after the government launched the ‘Make in India’ campaign, Czech carmaker Skoda said it is holding back its future investments in the country citing ‘uncertainties’ relating to policy framework.

The company, which on Thursday launched an updated version of its mid-sized sedan Rapid priced between Rs 7.22 lakh and Rs 10.97 lakh (ex-showroom Delhi), has also put the small car project on the backburner owing to uncertainties in the industry related to “tax issues and other disputes”.

Skoda Auto India Chairman and Managing Director Sudhir Rao said issues like technology transfer agreement, Fiat case (payment of excise duty on the discounts) and the recent order by CCI, which imposed fine on several auto makers, are some of the issues which are making global automakers like Skoda to not invest further in India.

“We would like to invest more in the future provided these uncertainties start making us feel more comfortable. If these uncertainties become a thing of past and we are clear of the rules of the game as to speak then we can compete according to those rules in the game,” Rao said

Skoda, which sells models like Superb, Octavia and Yeti in the country, has so far invested around 750 million euro in India.

“…I think if we were a lot more gung ho, optimistic, we would have made the decision to invest heavily in the Fabia replacement. So, what we have done instead to succeed in India is that we are working on other aspects like the Rapid facelift project,” Rao said.

Elaborating further on the project, he said: “We have engaged Mahindra engineering services to help us with engineering aspects to create a design, which is simpler and works in India and also matches Skoda specifications.”

The completely new Rapid, on which the company is experimenting to cut down on the cost of production on the future products, is expected to be launched after three years.

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