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Skoda's Yeti small off-roader - using four and front-wheel-drive formats - will be aimed directly at Ford's Kuga and Nissan's Qashqai when it arrives on the UK market in October next year.
Skoda's chief executive Reinhard Jung denied reports that the new compact crossover's launch had been delayed because of the credit crunch and shrinking 4x4 sales.
He told Business Car: "This is absolutely not the case. Yeti is on schedule and is very important for us in the current hard economic climate. We have carried out some slight fine-tuning in our testing programme to meet the target dates."
Senior VW Group veteran and member of Skoda's supervisory board, Detlef Wittig revealed the company was "carefully watching market trends" but maintained the shift in demand from larger to smaller SUVs and a general downsizing movement was "very much in the Yeti's favour".
He added: "Call it luck or foresight on our behalf."
By opting for two and four-wheel-drive variants on the Yeti, which shares components with VW's Tiguan, Skoda believes it will generate more fleet sales courtesy of lower fuel consumption and CO2 emission levels on the front-wheel drive versions.
Skoda's UK operation is also aiming at gaining conquest business from Toyota's RAV-4 and Honda's CR-V and will emphasise the Yeti's crossover characteristics believing there will be a significant share of buyers choosing two-wheel-drive.
VW's Czech division will expand its growing range during the first two months of 2010 with an estate car version of the Superb, which has secured a 70% fleet factor since its launch in September.
The new VRs Fabia, using a 170PS, 1.4-litre TSI petrol engine, will arrive later that year. In 2011or 2012 a smaller Skoda should join the growing ranks of sub B small cars with its interpretation of VW's radical Up.
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