The VW subsidiary expects an aggressive sales war in Germany and in other western European markets this year.
Skoda insiders say the automaker plans to continue selling the current Octavia even after the introduction of its successor.
The idea is to sell the old Octavia to consumers for whom the new model is too expensive (the new Octavia's basic price is about 14,700 euros).
Special models of the old Octavia equipped with sophisticated extras will be sold for less than 14,000 euros in Germany. The main target of the sales offensive is Opel Astra drivers.
Skoda hopes to reduce warehouse stocks to 70,000 from 88,000 units by the end of 2004.
Skoda wants to further integrate its importers into its sales organization and also is working on a new used cars strategy.
A decision will be made soon on whether the Roomster minivan concept, which was shown at the IAA in Frankfurt last September, will be produced.
Last year Skoda sold 449,758 vehicles. Its target for 2004 is 451,000 cars.