Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

HN: Czech economy relies on car production too much

Share on facebook
Share on twitter
Share on linkedin
Table of Contents

Prague, Feb 8 (CTK) – The Czech economy becomes more and more dependent on car production, although the government has been trying to find an alternative to the car industry and make the country less reliant on it for years, daily Hospodarske noviny (HN) writes yesterday.
In 2016, the car production in the Czech Republic has been the highest so far. It grew by 11 percent, which is nearly four times more than the overall Czech economic growth (2.9 percent).
The car industry and especially car exports to other European countries are the basis of the current economic prosperity of the Czech Republic. Without new car factories, which were often built also thanks to investment incentives, economic growth would be slower, HN writes.
But reliance on car production is dangerous in the long term, which has been proved in the latest global economic crisis. If hard times come, both companies and families simply postpone the purchases of new cars.
“Czech industry is concentrated in one field,” economic analyst David Marek told the paper, adding that the country is extremely vulnerable in times of crisis.
Along with Slovakia, the Czech Republic is most dependent on car production in the EU.
The Czech car industry has been permanently growing for seven years and the trend is likely to continue this year. Car sales are record high all over Europe and car makers report a lot of new orders, HN writes.
As a result, Skoda Auto launches the full production of its first big sport utility vehicle, Kodiaq, in Kvasiny, east Bohemia. Hyundai has been making more expensive and better equipped cars in its plant in Nosovice, north Moravia.
It is hard to divert the Czech economy from the car industry. In the last several years, no new industrial field independent of cars was flourishing in the country, the paper writes.
Even investments in Czech glassmakers, textile factories, producers of electronics and other plants are more or less related to car production. Glassmakers produce mostly windscreens for vehicles, textile is used first of all for car seat covers or upholstery of car interiors and car radios are made in the Czech Republic in high numbers, the paper writes.
It writes that the Czech Republic is an attractive place for producers of car components since it is close to dozens of car plants in Central Europe and within a tolerable distance from big countries such as France, Italy, Spain and Britain.
It is not easy to try to develop new fields, unrelated to cars, in the country. A big growth in information technologies is not an option because IT experts are lacking on the Czech market already now, HN writes.
In 2016, the Czech Republic exported products worth 3,970 billion crowns. Cars (456 billion crowns) are the most common exported items and their components such as tyres, fuel pumps, lights, seats, windscreens and air-conditioning systems represent a considerable part of the exports as well.
($1=25.306 crowns)

most viewed

Subscribe Now