Skoda is preparing to bring a new low-cost sedan model in the international market by the year 2012. The new model will compete with Renault’s Dacia which has recorded huge sales volumes in past few months. The Dacia model is available as Mahindra Renault Logan in the Indian market. In the international market, Renault Dacia received leverage from government’s scrappage scheme and now Volkswagen is gearing up to bridge the gap between Skoda models and Renault Dacia which have a huge price difference.

Skoda’s first sedan is Octavia which is comparatively highly priced than Renault Dacia. Skoda may replace Octavia with the new budget model which will be smaller than Octavia. However, in emerging markets like India and China, Skoda will continue to sell Octavia model which is highly popular.

The new budget sedan from Skoda will hit the market by end 2011 or early 2012. It is expected to be priced between 10,000 Euros to 12,000 Euros which is approximately Rs. 6.7 lakh - Rs. 8.04 lakh. Skoda has not revealed any official details of the car that will be placed between Fabia and Octavia.