At the Birmingham motor show Skoda launched the Octavia RS saloon, its fastest ever road car with a top speed of 145mph. It uses an uprated version of Volkswagen Group's 1.8-litre turbo petrol engine to develop 180bhp and has lowered suspension and sports styling.

Rob Tracey, Skoda UK director, believes the 21-derivative Octavia range is back in the value-for-money sector following a 13% price reduction. The 1.4 Classic saloon costs £9,800.

Skoda dropped its three-year servicing package to achieve the new pricing points but retained the three years unlimited mileage warranty.

Rob Tracey, Skoda director, predicted 40,000 annual Skoda sales in the UK by 2004. This year was on target for 30,000 sales.

Mr Tracey said the Fabia estate, due in March, was “a star car” and 7,000 were allocated next year.