Czech Car Sector To Reduce Production To 250,000 Vehicles This Year Due To Chip Shortage, Will Lose $9.14B

Czech car sector set to reduce production to 250,000 vehicles this year due to the global chip shortage. 

The automotive sector will lose 200 billion crowns ($9.14 billion) in sales, according to the AutoSAP.

Czech car makers will produce a quarter a million fewer cars than expected this year. This is due to the global shortage of chips and the automotive sector will lose 200 billion crowns ($9.14 billion) in sales, according to the Auto Industry Association (AutoSAP).

AutoSAP said domestic passenger car production dropped by 53.1% in September year-on-year, to 56,157 cars.

It said the chip shortage impact would exceed that of pandemic shutdowns last year, and called on the government to activate an aid program created amid the coronavirus pandemic last year to compensate firms for wages of idled workers.

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AutoSAP said production rose 2.9% year-on-year cumulatively in the January-September period to 831,653 cars.

“Already since August, production has been significantly affected by output curbs and the September statistic confirms the negative trend,” AutoSAP said.

The country’s biggest producer, Volkswagen’s Skoda Auto, has said it would significantly limit or shut production at its Czech plants from next week, possibly until the end of the year.

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The car sector is the backbone of the highly industrialized Czech economy, employing 180,000 workers, and making up a quarter of industrial output.

SAP said 120 billion crowns in revenue would be lost at carmakers and a further 80 billion at parts suppliers. The 200 billion crowns in revenue equal about 3.3% of the country’s expected nominal gross domestic product this year.

The other car makers with assembly plants in the Czech Republic are Hyundai — which has been the least affected by the chip shortage — and Toyota.

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