Czech Republic Autos Report Q2 2008

The Czech Republic's automotive industry continues to report positive gains, the absence of any significant investment this quarter notwithstanding. As BMI reflects in the Czech Republic Autos Report for Q208, two Czech manufacturers enjoyed significant global growth in 2007 against a challenging operating backdrop, while vehicle production in the Czech Republic itself hit record levels. New car registrations in the country are also on the increase, underlining the sector's overall health.

As mentioned above, vehicle production hit record levels in the Czech Republic last year. According to data from the Czech Automotive Industry Association (AIA), automotive output totalled 943,117 units in 2007, an increase of 9.94% on the previous year. The gains came despite a backdrop of stagnant growth in Western Europe and a significant downturn in new car registrations on the German market.

In line with data from the AIA, car production rose by 9.66% in 2007, to 932,016 units. The country is ranked second behind Russia on BMI's Business Environment Ratings Index thanks in part to the strong levels of output growth it is experiencing. Skoda was the biggest car producer, turning out 623,529 units, exceeding even its own forecasts for the year. The Czech carmaker had decided to raise full-year production to 616,000 units on the back of growing demand for its cars across Europe. The carmaker exported some 563,226 vehicles from the Czech Republic in 2007. Toyota Peugeot Citron Automobile (TPCA), the second biggest carmaker in the country, made 308,478 units, with exports totalling 306,916 units. Other results include a massive 58.25% increase in truck production, to 3,154 units, and a solid 13.87% rise in bus production, to 3,357 units.

Skoda is one of the companies that enjoyed significant sales growth abroad last year. After making significant gains in 2006, Skoda unveiled record results for 2007, including global sales of 630,032 units, up by 14.5% on the previous year. The carmaker's models proved particularly successful in Western Europe and gains were made in key markets such as France. In the Czech Republic, Skoda maintained its market lead, despite registering a 5.28% fall in new car registrations.

Iveco Czech Republic was the other Czech manufacturer reporting record results for 2007. According to company sources, the country's biggest bus manufacturer almost doubled net profit in 2007 to CZK1.56bn (EUR61.2mn), against CZK789mn (EUR30.9mn) in 2006. Iveco's revenues were up by 33% year-on-year (y-o-y) to CZK11.3bn (EUR443mn), with total sales reaching a record 2,897 units.