skoda Vs VW - What is the business strategy

I believe Skoda is owned by VW. So what is the point is producing cars to compete within the group.

Fabia Vs Polo

Rapid Vs Vento

Instead of providing options to compete with the other manufacturers, VW seems to be producing competition within its group. Segment-wise, these two are not much different. If the polo had a bigger engine or something like that, it would be different.

Possibly VW will try to do away with the less selling models in the future and they are putting up similar cars to see which fares better (??). 

Neah..its about getting the maximum market share that they can get hold of. They share common parts & hence production cost of these vehicles aint much compared to a vehicle designed & developed from scratch. Without much extra expenditure they are giving two different cars to people to choose from. So its a win-win situation.

No Matter who sells, VW gets the profit and the market share. Also the offerings in each of these cars are different in terms on build quality though the engine might be the space. Even dimensions are different.