Skoda's Rapid recovery

Despite seven years of what might be called abject success, Skoda says it's not giving up on the Australian market and has pointed to Germany – where it is the leading imported brand and outsells all Japanese and Korean marques – as an example of what it can achieve here.

One big step into the quality end of the bargain basement is the launch this week of what will be the cheapest European-built car on the market, the $18,990 Skoda Rapid – a Golf-sized small car built on a Polo platform, and boasting one of parent VW Group’s excellent 77TSI engines.

Volkswagen Australia boss John White says his company is committed to Skoda becoming a success in Australia.

"Are we where we wanted to be after seven years? No. But it comes back to product positioning and where we were before," White said at yesterday's launch of the new Rapid and the facelifted Yeti in Byron Bay.

"We were focused too much on the rental (car) market, but we’ve backed off on that and focused on the retail market for more sustainable business.

"(Skoda Australia director) Michael Irmer put together a business plan that was approved by HQ in Germany and part of that involved the cars you see here and the repositioning of the product.

"You will see Skoda volume increasing. It has a specific role and it complements the company."

For his part, Irmer says he is focused on changing the perception, and positioning, of Skoda in Australia.

"If you look at the way these two cars (Yeti and Rapid) are positioned on price now, it's the same as in Europe and they are extremely successful there," he said.

"Skoda is the biggest imported brand in Germany, a huge success. Collectively it gives you a glimpse of what the brand is capable of."

White denies that VW Australia’s decision to give up on the slow-selling Up was part of a plan to give Skoda a leg-up.

"The decision wasn’t made to help us bring something else from Skoda, it was made for the simplification of the VW brand in Australia," he said.