The Czech car maker said it is also working on compact car model which could hit the Indian market in a few years.
"Skoda Octavia's arrival into the Indian market also kicks off a five year strategy for Skoda which will make customers the brand's primary focus in addition to our long-standing reputation for making great products," Skoda Auto India Managing Director Sudhir Rao told reporters here.
Skoda Octavia was first launched in India in 2001 and was discontinued in 2010. It had sold 45,000 units by then.
As part of its strategy, the company is aiming to enhance after sales experience for the customers and also enhance its product portfolio in the country.
Rao said: "We would also like to work on the back-end of operations as part of our long term strategy in the country."
The company is developing internal resources that will enable it to develop products, including a small car, that are relevant to India and carry Skoda credentials, he added.
"We are working on small car, there are development programmes for the mid and long term," Rao said without disclosing details.
At present, he said, Skoda India continues to sell compact model Fabia on demand.
The new Skoda Octavia, which is the third generation model, comes in four engine variants - 2 litre diesel (automatic and manual), 1.4 litre petrol and 1.8 litre petrol.
While the petrol variant is priced from Rs 13.95 lakh to Rs 18.25 lakh, the diesel version comes between Rs 15.55 lakh and Rs 19.45 lakh (ex Showroom, Delhi).
With the launch of the new model Skoda Octavia, the company said it will phase out premium sedan Laura from the Indian market. For the time being, however, it will be available on order.
When asked if the company plans to enter the lucrative compact SUV segment, Skoda Auto India Director Sales and Marketing Pawel Szuflak said the company is "exploring various segments".
He said the company has already received 500 bookings for Skoda Octavia so far. Besides, he added that in order to make its Rapid sedan more attractive, the company would go for step by step upgrade of the model so that it remains attractive for the buyers in the country.
Skoda Octavia is sold across 40 countries across the globe and currently has a waiting period of five months in the European market, Szuflak said.