Car manufacturers saw record revenues last year, but expect 20 percent production fall in 2020

Car and associated component manufacturers in the Czech Republic saw record revenues of CZK 1,123 trillion last year, a 1.9 percent increase compared to 2018, the Czech Automotive Industry Association announced on Tuesday. Exports rose by 2.4 percent to CZK 942 million, with Germany being the destination for a third of products sold abroad. However, car production is expected to fall by around 20 percent in 2020, mainly as a result of the COVID-19 pandemic.

The Czech automotive industry fared particularly well last year, but is facing a decrease in revenues in 2020. That was the main message at Tuesday’s press conference of the Czech Automotive Industry Association.

Automobile manufacturers produced a total of 1,427,563 cars in the Czech Republic in 2019. Although, this was 0.7 percent less than in the previous year, this did not affect revenues, which reached a record high.

The slight decrease in the amount cars made in the country was mainly the result of a 9 percent fall in production at the Hyundai plant in Nošovice. Production at the main Czech automobile manufacturer Škoda Auto rose by 2.5 percent to reach a record number of 907,942 cars.

The President of the Czech Automotive Industry Association Bohdan Wojnar, who is also a member of the Škoda Auto board, said that 2019 saw Czech automobile manufacturing reach a new height with the trillion crown mark being crossed for a fourth year in a row.

However, he also stated that the sector is now facing concerns, as the coronavirus pandemic has already resulted in a CZK 150 billion decrease in 2020 revenue, with further losses likely to come. Overall, the fall in car production this year is expected to lie at around 20 percent, he said.

The association expects productivity to by mainly impacted by developments in foreign markets and support measures of the Czech government. In this regard, Mr Wojnar said that car manufacturers are asking for an extension of the Antivirus state support programme until a new systemic solution is launched. Especially important are investments into digitisation, automatization and ecological solutions, he said.

The amount of workers employed at car manufacturing plants in the Czech republic rose by 1,000 to a total of 133,000 last year, with the average salary 29 percent ahead of the national average at CZK 43,949.