2021: Solid results of the Czech car industry despite a decline in production

28/6/2022 |Articles are machine translated

Do výkonnosti automobilového průmyslu také v roce 2021 zasáhla pandemie covidu-19, i když tentokrát odlišně. Její následky se v silně globalizovaném odvětví projevily především ve druhé polovině roku. Kritický nedostatek polovodičových čipů, problémy v dodavatelsko-odběratelských řetězcích i v logistice, nedostatek surovin a dalších materiálů včetně růstu jejich cen vedly společně k zásadnímu narušení výroby u většiny evropských automobilek. I přes další pokles výroby vozidel v České republice se podnikům podařilo meziročně zvýšit celkové tržby i export a zároveň udržet zaměstnanost i růst mezd.

“The automotive industry is now in its third year of struggling with a combination of many negative factors. Although 2021 will probably be remembered as the year of the chip crisis, it was not only semiconductor customers who faced problems. Supply chains and logistics are still far from working as we were used to. Delivery times for parts and raw materials have increased significantly and as a result, input prices have risen significantly. Production was volatile across the world – while car production in Asia, for example, rose by almost seven percent, the European car industry lagged behind with a further decline in production of almost six percent,” says Martin Jahn, President of the Association of the Automotive Industry. “On the other hand, the performance of domestic companies must be highlighted. Despite all the negatives, the companies associated in AutoSAP managed to increase their total sales. It is only for the third time in history that they have exceeded the threshold of CZK 1.1 trillion, which indicates, above all, a further shift towards production with higher added value,” adds Martin Jahn.

The shortage of semiconductor chips began to manifest itself in world trade at the beginning of last year, but it became fully apparent mainly in the third and fourth quarters, when vehicle production in the Czech Republic was far below its standard. The situation in the chip market has also had an impact on production this year. “It was only in May, when car production reached the “pre-crisis threshold” of 120,000 new cars, that production in the Czech Republic saw at least some optimism. Demand for new cars is still high, but the production situation remains very difficult. We are therefore cautious in our forecasts, the supply and demand chains are still very volatile due to the covid pandemic, problems in logistics and the geopolitical situation, and further developments are therefore difficult to predict,” says Martin Jahn.

The positive news is that the number of employees did not have a negative impact last year, as the number of employees in AutoSAP companies even increased slightly. The average wage in the sector also rose to more than 46,000 crowns. “Employment, above-average wages and tax levies have a positive impact not only on the development of virtually all regions of the Czech Republic, but also on the domestic budget, to which the sector contributes an estimated CZK 70 billion annually in direct taxes and compulsory levies. In addition, the automotive industry is a leader in science, research and innovation in the Czech industry, both in terms of the growing share of R&D personnel in companies and in terms of total investment, which accounts for almost a third of all industrial investment in R&D in the Czech Republic,” says Miroslav Dvořák, Vice President of the Automotive Industry Association and Chairman of the Board of Directors of MOTOR JIKOV Group. In connection with the current developments, he also warns of the impact of the energy crisis and its effects on the innovation potential of companies. “Just like the whole economy, companies in the automotive industry are also affected by the dramatic rise in the prices of energy and other inputs. Recently, production prices in the industry have been rising at a double-digit annual rate. The cost of electricity and gas has increased five to seven times year-on-year, not just in our businesses. Unfortunately, this limits manufacturers’ efforts to meet the demands for wage growth and to continue with investment plans, the limitation of which will lead to a loss of competitiveness of our companies vis-à-vis those from countries where energy prices have been capped. State aid is therefore really crucial for many companies. The whole situation is not helped by the trade unions, which have unrealistic demands in these difficult times, so we are unnecessarily dividing our forces through lengthy negotiations,” adds Miroslav Dvořák.

An equally important task for the current government will be to carry out a historic transformation of Czech industry. The advent of clean mobility, the pressure for efficiency and the associated higher levels of robotization, automation and digitalization of production, and of course the constant pressure for more environmentally friendly production, bring a whole range of challenges for businesses and the government.  “Although it is obvious that at the moment the government is mainly dealing with tasks related to the energy crisis, we must start working on the strategic direction of Czech industry as soon as possible. This is not only about current support for companies using available national and European resources, but in the longer term we must prepare for changes in the labour market and changing requirements for the competences of employees in the car industry. It is necessary to prepare targeted re-skilling and up-skilling training programmes for employees and at the same time to adjust the existing system of technical education with a greater focus on electronics, IT, cyber security and other required competences,” points out Martin Jahn.


AutoSAP member companies in 2021
  • SALES: CZK 1,101.6 billion (+ 5.9%)
  • EXPORT: CZK 911.5 billion (+ 4.5%)
  • NUMBER OF EMPLOYEES: 139,228 (+ 0.8%)
  • AVERAGE WAGES: CZK 46,292 (+ 2.2%)

After a one-year pause, total sales again surpassed the CZK 1.1 trillion mark and increased by 5.9% compared to 2020. The volume of exports also increased by 4.1% to CZK 911.5 billion. Overall, exports of goods and services account for 84% of total revenues. The most important markets for domestic companies are the countries of the European Union, with Germany dominating (29.6% share). The companies of the Automotive Industry Association accounted for almost 30% of the total production of the domestic manufacturing industry; the share of AutoSAP members in the total exports of the Czech Republic was 19% last year.

The number of employees remained virtually unchanged last year. Companies managed to retain key employees and even slightly increase their total number to 139,228 (+0.8%). The shortage of employees, especially those with higher qualifications, remains an important issue.

Wage developments were also in line with market developments. For the first time in history, the average wage in the Association’s companies exceeded the threshold of CZK 46,000, thus exceeding the average wage in the Czech Republic by 22.3%. The highest average wage is reported by final producers – more than 55,701 thousand crowns, followed by special purpose organisations with an average wage of more than 50 thousand crowns, but also suppliers pay their employees above average wages of more than 40 thousand crowns.

Members of the Association of the Automotive Industry represent 13% of employees in the manufacturing industry of the Czech Republic and together they generate 28% of the manufacturing industry’s sales. The entire automotive sector directly employs almost 180 thousand people in the Czech Republic.

Vehicle production in 2021

  • TRADE: CZK 632.4 billion (+ 4.2%), of which EXPORT: CZK 572.3 billion (+ 4.2%)
  • EMPLOYMENT: 48 247 persons (+ 4.5%)
  • AVERAGE WAGES: CZK 55,701 (- 2.5%)
  • PRODUCTION:
    • PASSENGER CARS: 1,105,223 units (- 4.1%)
    • BUSES: 4,947 units (- 2.4%)
    • CARS: 1 262 units (+ 6.9%)
    • MOTORCYCLES: 1 035 units (+ 87.2%)
    • TRAILERS AND SEMI-TRAILERS: 29 231 (+ 10.5%

Suppliers in 2021

  • TRADE: CZK 447.1 billion (+ 7.8%), of which EXPORT: CZK 334.0 billion (+ 5.6%)
  • EMPLOYMENT: 81 211 persons (- 1.3%)
  • AVERAGE WAGES: CZK 40 160 (+ 4.8%)

Special purpose vehicles in 2021

  • TRADE: CZK 22.2 billion (+ 19.0%), of which EXPORT: CZK 5.2 billion (- 19.0%)
  • EMPLOYMENT: 9 770 persons (+1.2%)
  • AVERAGE WAGES: CZK 50,789 (+6.0%)

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