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Skoda, which has now been in India for nearly 15 years, is looking at the new Octavia to turn around its fortunes in 2013.
The new Octavia, which replaces the second-generation model (badged as the Laura in India) will be launched by Diwali.
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The new Octavia is larger, both on the inside and outside when compared to its predecessor and boasts of superior efficiency, features and build quality.
With a new design language, Skoda is hoping to capitalise on its "premium-budget" image in markets like India.
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Speaking to Business Standard at the Geneva Motor Show, Jozef Kaban, chief exterior designer for Skoda Auto said, "The idea behind the current design language is to ensure Skoda designs are timeless."
He said that the Octavia's design is 'inspired' by Czech culture and that it has the same sort of Czech influences that the Ambassador has in India.
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According to sources, Skoda may discontinue the Laura badge and will bring back the Octavia nameplate for the third-generation Octavia in India.
Skoda, who had begun their innings in India in 2001, had the first-generation Octavia as their debut product.
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Aimed at the entry D-segment, the new Octavia will be offered in India with a whole host of petrol and diesel engines and possibly even a CNG version in the years to come.
It will be priced in the region of Rs 12 to 17 lakh and will take on the likes of the Chevrolet Cruze, Toyota Corolla and Volkswagen Jetta.
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To be assembled at Skoda's facility in Aurangabad, the new Octavia comes in at a time for Skoda when sales across the market have stagnated or seen a decline.
While the company has shown growth in the 2012 calendar year of 13 per cent, it faces tough challenges as several of its products like the Fabia hatchback and Yeti SUV have failed to excite customers.