Too bad, model Enyaq.
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First restrictions due to Kovid-19, and now a shortage of microchips and raw materials: carmakers in the Czech Republic are facing a severe crisis. This is fatal for the economy – the sector produces 10% of the country’s GDP, he said Deutsche Welle.
The automotive industry is one of the most serious pillars of the Czech economy. At maximum load, the plants of Skoda (part of the Volkswagen concern), Toyota and Hyundai produce over 1.3 million cars a year. In the Czech Republic, a country of tens of millions, nearly 120,000 people are employed in the industry, and car exports account for more than half of all Czech exports. Logically: car manufacturers are among the most serious taxpayers in the country.
Blow after blow for the automotive industry
For months, the Czech Republic was among the countries hardest hit by the pandemic. And it also affected the automotive industry. Many hoped that one year after the appearance of the coronavirus, production would resume and reach its old level. But as early as the summer, the sector faced a new challenge: an acute shortage of microchips needed for production. Two weeks ago, on October 18, the flagship of the Czech car industry, the Škoda plants, from whose production lines nearly one million cars came down in 2019, was forced to shut down completely. The workers were sent home. They now receive 80% of their salary compared to their average earnings in the past. It is true that production was partially resumed on Sunday thanks to a shipment of chips from Malaysia, but there are still plenty of difficulties – due to a shortage of other components. Let’s not forget that Skoda’s plants contribute as much as 5% of Czech GDP.
It turns out that the largest concern in the Czech Republic will have to ask for state aid instead of depositing large sums in the tax treasury. And not only the Skoda plants, but also the hundreds of small companies that produce the respective components. According to Zdenek Petzl, executive director of the Czech Automobile Industry Union, only about 1 million cars will be produced in Czech plants this year, which means that turnover will fall by as much as 10.2 billion euros. The shortage of microchips will seriously affect the manufacturers of individual components – a segment in which six times more people work than in the car plants themselves, Petzl said.
At a tripartite meeting between the current government, employers and unions in October, it was decided that the state would provide temporary financial assistance to the car industry. “We will help the industry and subcontractors,” said Andrei Babish, who was still prime minister. And the Minister of Industry and Transport, Karel Havlicek, added that the state support will amount to 60% of the salaries paid to the workers so far. “This is fair because it is a key economic sector that produces 10% of the Czech GDP. If there is no aid, 100,000 jobs will be endangered,” Havlicek added. Next Monday, the Czech government will make a final decision on aid to the industry.
A new problem is posed
The current chip crisis seems only a harbinger of the big problems that the Czech car industry has yet to face. Because in the framework of the EU Green Deal, Czech carmakers must gradually move from the production of cars with internal combustion engines to electric cars.
“Unfortunately, from our point of view, there is no other way but electrification to achieve the necessary reduction in carbon dioxide levels,” admits Michal Kadera, head of International Relations at Skoda. “But it will be a big and expensive challenge,” he added, explaining that by 2030, Skoda plans to supply more electric cars to European markets than cars with internal combustion engines.
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