Skoda is ready to bring a new low-cost budget sedan model in 2012 in the international market. The new sedan model will compete with Renault’s Dacia which has recorded the strongest sales in past few months, especially in the sedan segment. Dacia received most of the benefit from the government scrappage scheme and now Volkswagen Group intends to bridge the gap between Renault Dacia and Skoda models which have a big price difference.

Skoda currently sells Octavia as a popular sedan internationally especially in the emerging markets including India and China. Skoda intends to replace the Octavia with new budget model which will be smaller than Octavia. The new budget model will directly replace Octavia in the developed markets.

Skoda CEO, Mr Reinhard Jung, said the new model would cost between 10,000 and 12,000 euros (Rs. 6.7 lakh – Rs. 8.04 lakh) and would launch in two to three years. Skoda has not revealed any more details about the car which will be placed between Fabia and Octavia in coming years.