Czech auto industry buoyed by foreign investments image

Outside capital has transformed the Central European country into Europe’s fifth-largest auto producer, building close to twice as many vehicles as Italy in 2013.

The country’s only champion back in the days was Skoda Auto, but the national producer has long been acquired by the Volkswagen Group, taking full control in 2000. Then, the Czechs became enticing for Hyundai, starting the construction of a plant there in 2006. Now, after a one billion euro-investment from France and Japan, there’s also a unique joint venture between PSA Peugeot Citroen and Toyota to build around 250,000 cars in a huge assembly facility.

“This joint venture is a complete success. In terms of production volume, quality level and cost, the standards of cars here are the same as from any factory in France or in Japan,” says Kenta Koide, president of Toyota Peugeot Citroën Automobile, which operates the Ovcary factory.

“We have combined the strengths and the synergies of the two companies?.?.?. with the strengths of the Czech Republic,” says Javier Varela Sobrado, executive vice-president of the joint venture. “Competencies here are very high. In terms of suppliers and infrastructure, this is the most attractive place to build cars in central Europe,” he adds.

Foreign carmakers invested together a total of at least 14 billion euros in the nation and created revenue of many other billions in the horizontal industry. The country offers numerous benefits that make it a profitable car making hub: it’s a member of the European Union and it’s close to the middle of the region with easy access to big markets such as Germany or Italy. Also, Czech engineers and other scientists were highly qualified, providing the necessary talent pool at a fraction of the cost associated in western markets such as France.

Via Financial Times