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Czech Auto Production Expected to Improve

PRAGUE, Dec 30 (Reuters) - Czech car production should rebound in 2014 as the European market slowly recovers, after dropping about 4 percent this year, the head of the Automotive Industry Association said on Monday.

The car sector is a key component of the export-oriented Czech economy, which is set to contract around 1 percent this year, according to Finance Ministry forecasts.

The association estimated passenger car production dropped to 1.12 million vehicles in 2013 from 1.17 million in 2012.

"The fall this year is because of the situation on European markets, where there are still drops even though we have seen some improvement in the second half," Antonin Sipek, director of the association, said. "Next year we are counting on the same level (of production as in 2012)."

European car sales picked up in November but the market is near the end of a sixth consecutive year of decline.

The Czech economy shrank by 0.1 percent quarter-on-quarter in the third quarter after officially pulling out of a record six-quarter recession earlier this year.

Volkswagen unit Skoda Auto is the biggest of the three Czech car makers and has seen global sales rise during the second half of the year, boosted by the launch of new models.

South Korea's Hyundai Motor also operates a plant, which is running at full capacity thanks to shifting exports to markets outside Europe.

But the country's third plant, a joint venture between Toyota Motor Corp and PSA Peugeot Citroen, has suffered from weak European markets. (Reporting by Jason Hovet; Editing by David Holmes)