Skoda has the “biggest growth potential” among Volkswagen Group’s volume brands because of its appeal to more traditionally minded budget buyers, VW Group’s sales chief, Christian Dahlheim, said.

The brand’s customers have a social status classed as middle to lower, and seek functionality from their car above other needs, Dahlheim said.

“Skoda is ideally positioned to tackle segments where people are not able to afford higher priced cars,” Dahlheim said during an online presentation to analysts focusing on the positioning of VW Group brands. “On the volume side in percentage terms, Skoda has the biggest growth potential.”

Skoda will not be repositioned to compete with Renault’s low cost brand Dacia, Dahlheim said. “We don’t like that comparison because we do not want to reduce Skoda to tapping into that competitor,” he said. “Skoda has fabulous competitors with the French brands and, of course, Ford.”

Skoda’s “Simply Clever” marketing slogan demonstrates the brand’s customer group, Dahlheim said. Skoda “should take customers from other brands, not our own,” he said.

The VW brand will remain a volume brand, targeting what Dahlheim called the “Top Volume” sector. Most VW customers buy their cars through leasing or financing and need high residual values, he said.

Skoda can win more customers in the “traditional mainstream” buyer group without going downmarket, Dahlheim said.

VW Group’s other volume brand, Seat and its Cupra performance arm, brings the young customers to the group, he said.

Skoda has been problematic for the VW Group because its lower production cost base in the Czech Republic gives it a price advantage over VW brand cars using the same platforms that are built in high-wage Germany.

Reports in the German press in 2019 suggested VW Group CEO Herbert Diess was looking to move the brand more downmarket.