Business News

In this week’s Business News: Škoda Auto sets first half sales record; foreign investment flows pick up; defence minister declares war on tender corruption; construction giant to challenge suspicious contract decisions; and on course for a golf empire.

Chinese sales help Škoda Auto set first half sales record

The country’s biggest exporter, car manufacturer Škoda Auto, has set a new half year sales record with almost 379,000 Škoda cars finding new owners in the first six months of the year. That is a 15 percent hike compared with last year. China was the driving force behind the success with an 83 percent increase pushing car sales there to just over 84,000. Sales in Germany, the second biggest market, almost halved to total 48,000. Demand there has dropped off following the boost last year from scrap incentives.

Foreign investment in first quarter exceeds 2009 total

Photo: Štěpánka Budková

Foreign investment flows into the Czech Republic appear to be recovering after a disastrous year in 2009. Last year investment more than halved from a year earlier to around 52 billion crowns (around 2.7 billion US dollars), giving the country its worst ever position in a world ranking of investment destinations. But the foreign flows have picked up to around 53 billion crowns in the first quarter alone. Most of that money is believed to be in the form of loans from multinationals to their Czech branches to fund their expansion.

Defence minister to attack contract ‘jungle’

The new Czech minister of defence, Alexandr Vondra, has declared war on what he describes as the jungle of dubious procedures and practices that have made the Czech army a haven for corrupt deals. Mr. Vondra says he will abolish the practice where the ministry was allowed to sound out only one bidder for around 90 percent of tenders. The ministry has purchased around 10 billion crowns in equipment and services over the past five years without any competition. A law channeling all foreign purchases through Czech middlemen will also be scrapped, says the minister.

Skanska to launch legal challenges to suspect tender decisions

Photo: Kristýna Maková

Meanwhile, the country’s biggest construction company, Skanska, says it will launch a legal challenge to every public tender where it believes there has been foul play. The firm relies on big public projects for around two-thirds of its turnover, but says there are dozens of cases where it has unjustly been excluded from tenders. One of these, it says, was the tender to carry out repairs to Prague’s famous Charles Bridge. The Swedish company’s Czech manager says it should start challenging decisions in the autumn and will take the cases as far as it can. The Czech construction sector is dominated by around five companies.

CZ Golf plots course expansion

A nationwide chain of golf clubs: that is the dream of two former Czech steel company owners who are already well on course to achieve their ambition. CZ Golf is already the biggest golf club manager with three in the Czech Republic, one in Austria and cooperation with another 11. The owners say the business potential of golf in the Czech Republic is far from being realized. They plan a half billion crown capital increase to launch more courses across the country.