Yep Skoda wants to play the luxury card game but the truth is - Fabia is to Europe what i10 is to India.
Fabia doesn't compete with midsize sedans in Europe but with hatchbacks like Fiat Punto/ Renault Clio / Vauxhal Corsa/ Ford Focus etc. In Europe it's priced from roughly 6.2 to 10 lacs, and has FIVE engines-
1.2 petrol- 60 and 70 bhp
1.4 petrol- 84 bhp
1.6 petrol- 105 bhp
1.4 PD- 70 and 80 bhp
1.9 PD- 105 bhp.
Here they have priced it from roughly 5.3-8.3 lacs (on-road Chandigarh) and have given 1.2/60 bhp, 1.4/84bhp petrol + 1.4PD/69bhp engines.
I test drove 1.4PD (petrol's not launched yet) and the guys at local dealership say top end 1.4PD is being bought more, that too by people who already have an Octavia/Laura etc. The other two trims buyers are those who already have a midsize-sedan or a premium hatch .
So Skoda wants to pull buyers from both premium hatch and midsize segments. No doubt the car is competent- with space similar to City/SX4/Verna/Fiesta/Getz/Aveo and bigger than rest, good dynamics, more bells whistles & Saftey equipment than some cars even a class higher.
But with Skoda targeting 1200 cars / month are they really trying to compete with sedans.. I don't think so.
They are simply offering a gr8 European hatch without heavy cost-cutting exercises like Maruti & Hyundai did on Swift & Getz (seat padding, parcel shelf, cabin plastics etc.) even Honda did on City (no ABS/airbags initially & now also only on VTEC).
P.S. Mr. jimgeo, the Fabia holds its value well in Europe (way better than Swift/Getz and and in league of other large hatches). Check Autocar, AutoExpress,TNS UK/Europe.