Skoda Auto or Skoda, Czech Republic’s biggest automobile exporter, resumed its production on Monday, April 27, 2020, amid uncertainties of global market behavior due to the coronavirus epidemic, which destroyed the automobile industry across the globe. With the government started to loosen up restrictions to boost the economy of the country, the automobile company has decided to re-launch its productions.
Skoda Resumed Productions
Skoda, owned by Volkswagen Group (Volkswagen), closed down its operations in March since the health crisis prompted by the virus pandemic across Europe had exacerbated and several governments in the region had imposed national lockdowns by putting restrictions on movements. A source reported that “the automobile industry accounts for a tenth of the country’s economic output, a quarter of exports and 150,000 jobs but looks set to run well below capacity in 2020.”
With a slow decline of the new virus-infection cases in the Czech Republic, which has around 10.7 million people, the government of the country had lifted restrictions to some economic sectors. On Monday, several shops up to the range of 2,500 sqm, and other places such as fitness centers reopened under the government’s phased plans besides the reopening of Skoda’s production.
Skoda workers have now returned to their production units following the strict government’s guidelines of wearing masks and conducting temperature checks as part of 80 new company measures from hand sanitizing stations as well as expanding break areas to extra time for cleaning work stations.
Worries over Market Uncertainties
The director of the Automotive Industry Association (AutoSAP), Zdenek Petzl put a concern referring to the new re-launch of car manufacturing in the country especially Skoda, “The beginning of the restart will be pretty shaky,” adding that “The biggest fear is… what markets are going to do.” The association noted that around 90% of Czech automotive firms had shut or limited output since March but most of them would soon start reopening their productions in the coming weeks.
AutoSAP explained that the country witnessed a 36% drop in car production last month, which had impacted a loss of 67 billion crowns ($2.68 billion) in revenue for the manufacturers and suppliers. Meanwhile, Petzl expected that almost all April production would be lost before a return to 60% of capacity in May with an estimated output of the sector would be at 60-90% of capacity this year.
The car association cited that nearly 4,000 jobs, mostly agency workers, have been lost so far due to the impact of the virus outbreak while 42% of firms are currently considering layoffs of their existing workers. Skoda, which operates the largest of the central European country’s three-car plants, would limit its production while it produced 1.43 million vehicles in 2019.
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