William Malcolm

Czech Automakers See Revenues Drop By 10% In 2020

Revenues of domestic car manufacturers and parts manufacturers fell by 10.3 percent to 1.04 trillion crowns last year. Exports fell by 9.8 percent to CZK 872 billion. The reason for the decline is the worldwide coronavirus pandemic. Production of passenger cars decreased by 19 percent to 1.15 million cars. This was stated today by representatives of the Association of the Automotive Industry at a press conference.

Revenues of final producers fell by eight percent to 606 billion crowns, while in suppliers they decreased by 13 percent to 415 billion. Revenues for companies in research, development, and services fell by 18 percent to 19 billion.

“Despite several negatives, last year also brought some positive news. The strength of the Czech car industry was shown, which managed to return very quickly after the spring outages. Last June we predicted a drop in sales of about 215 billion, the final account is finally more favorable, although, despite all the difficulties, total revenues again exceeded one trillion crowns.

The impact of the pandemic on the number of employees in the automotive industry was minimal. Among other things, thanks to the government’s Antivirus program, companies managed to retain key employees during the crisis. The total number of workers in the industry fell by two percent to 135,624 people. For the first time in history, the average wage at the association’s companies exceeded 45,000 crowns and grew at a similar rate as the average wage in the Czech Republic. As in the previous year, it exceeds it by almost 27 percent.

The carmakers are still working in crisis management mode this year. Like other industries, it addresses the shortage of raw materials throughout the supply chain and changing logistics flows – all at a time of record rising prices and labor shortages across the industry. “In addition, the situation regarding the development of the covid remains uncertain. We can expect an improvement probably in 2022 at the earliest,” said Robert Kiml, CEO of Toyota Motor manufacturing.

For the whole of this year, the association estimates production growth of 12 percent, which will still be nine percent below 2019. According to the association, resolving the health crisis is one of the key factors in maintaining production in the second half of the year as well. The carmakers support a prudent approach and call for the adoption of a long-term and transparent testing and vaccination strategy, clearly defined processes in case of further waves of the pandemic, including the adoption of foreseeable emergency measures by the government.
In addition, the coming months will bring a discussion on several key regulations, in particular the reduction of CO2 from transport or production or the EURO 7 / VII emission standard.

Last year, Czechia was the third-largest producer of passenger cars in Europe and the tenth in the world. In per capita terms, it continues to be number one in bus production and number two in passenger car production. Members of the Automotive Industry Association represent 13 percent of employees in the Czech manufacturing industry, who together generate 29 percent of manufacturing revenues.

By the end of May, car production had risen by forty percent to 559,934 cars. Production of passenger cars in the five months of this year increased by 40 percent year on year to 559,934 cars. Compared to the period from January to the end of May 2019, it is still a tenth less. The Association of the Automotive Industry announced it today.

Production continues to be negatively affected by disrupted supply chains, a global shortage of semiconductors, but also other raw materials, and a shortage of manpower. The high year-on-year increase is since last year production virtually stopped in the second half of March and in April, with a few exceptions.

“Demand for new vehicles remains well below pre-crisis levels in 2019. In EU countries, our main export markets, this decline is almost a quarter,” said Toyota Motor Manufacturing CEO and Vice President Robert Kiml.
Škoda Auto produced 365,186 cars in domestic plants, which represents a year-on-year increase of 38.5 percent. In May production there was a shortage of chips, due to which the carmaker produced 59,881 cars, ie 27 percent less than in May 2019, in the period before coronavirus.

Nošovice’s Hyundai increased production by 46 percent to 116,300 cars. From January to May, 78,448 vehicles were produced in Toyota, an increase of 39 percent. Of the total number of passenger cars produced, 9.6 percent were electric.

In the first five months of the year, 1,810 buses were produced, ie 5.5 percent more than last year and 12.6 percent less than in 2019. Iveco produced 1,666 buses, an increase of 8.4 percent, SOR Libchavy, which as one of the few manufacturers, it did not stop production even in last year’s first covid wave, it produced 138 buses, which is a decrease of 19 percent. Truck manufacturers report results for the quarter only.

In the new year, the production of Jawa motorcycles continues to thrive. So far during the year, it has produced 477 machines, which after last year’s decline meant an increase of 304 motorcycles.