Skoda downgrades diesel

Skoda is moving away from turbo-diesel engines in Australia as customers shift to increasingly efficient turbo-petrol engines and the Volkswagen Group's 'dieselgate' emissions scandal rolls on.

During a media briefing in Melbourne this afternoon, Skoda Australia director Michael Irmer confirmed the company has elected not to directly replace the all-wheel drive 103TDI Yeti compact SUV. That model variant was powered by the controversial EA189 engine that was withdrawn from sale when it was discovered it was fitted with a 'defeat device' that allowed NOx emissions about 40 times US limits.

Although a diesel replacement is available from the factory, the company will instead add a 110TSI Yeti as a new flagship for the range in October or November, growing the turbo-petrol line-up to four models and returning AWD to the range.

Irmer also made it clear there was no interest in adding diesel in Fabia and Rapid mini and small car ranges. Instead, diesel will only continue to form part of the larger Octavia, Octavia Scout and Superb line-ups.

The large Kodiaq SUV is likely to include turbo-diesel options, although Irmer wouldn't confirm that so far out. The all-new seven-seater will be revealed at the Paris show in September and has been revealed already in concept form. It is due to go on-sale here early in the second half of 2017

Irmer also suggested the second generation Yeti due on-sale here in late 2018 would be unlikely to add a turbo-diesel.

"I don't think so, it's not yet decided," Irmer said.

"On new Yeti I can't make speculations yet because we haven't decided on the drivetrains.

"It's too far away for us. At the moment we are working on Kodiaq and we haven't made decisions on Kodiaq engines yet."

Irmer forecast the latest generation EA288 turbo-diesel engine – which is currently offered in 110kW/320Nm and 135kW/380Nm tunes in the Octavia and a 140kW/400Nm tune in the new Superb would account for only about 10 per cent of sales.

"What we have found is the petrol engines have become so incredibly good there are less reasons to buy a diesel," Irmer said.

"We are now having about a 90 per cent mix across the board for petrol engines in Octavias that negates having a diesel in the small cars, even the small SUV."

Irmer rejected any link between Volkswagen Group's #Dieselgate emission scandal and the softening interest in turbo-diesel engines.

"The diesel mix has not changed since [Dieselgate became an issue]. The diesel mix has remained much the same since we launched Octavia in late 2013.

"We had also anticipated the same for Superb and we anticipate this before September last year and it makes exactly what we anticipated – around 90 per cent [petrol sales].

"That's because the petrol engines are so good," he said.

As well as the Yeti, the just superseded Superb and 2009-13 Octavia all included Australian models powered by the EA189 engine. But while recalls have been announced, no dates have been set for a fix to be performed by local dealers.

"Skoda feels genuinely sorry for this to happen and we are doing our utmost to fix the cars that are out there," Irmer said.

"Once we have the first car we sold in Australia certified in Europe – because that is the lead legislation for Australia – we will send it to the local authorities and once that is approved we will roll out the local rectification measures.

"The topic from that point of view will stay with us and we will work very, very actively on fixing the cars.

"We feel really sorry about it; it's not a topic you like to have in your business but on the other hand customers will in the end have a car that is legally compliant and no worse [performance] than before.

"So if we can achieve that then we will come out of this."

Irmer said there was no evidence of Dieselgate having an impact on Australian Skoda sales.

"We had an all-time record in May and June is looking very, very good as well," he said.

The introduction of the turbo-petrol Yeti 110TSI will fill a significant sales hole in the local Skoda line-up. It is expected to sit at the top of the range, priced above $33,000. Yeti sales are down 46.7 per cent year-on-year.

"Four-wheel drive made up about 30 to 40 per cent of sales in Yeti and that's obviously sales we don't have right now, so that's why it's important for us to bring it back on again," Irmer said.

In the longer term Irmer acknowledged that Skoda Australia would fall into line with Volkswagen Group's global push to electrification, even though there are no local subsidies and limited infrastructure.

"I believe Australia in this point of time would be premature to have it, but in there or four years the situation could be very, very different," he said.