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May 28, 2008

CZECH REPUBLIC: Government spends to keep Skoda sweet

The Czech government on Wednesday said it would spend 1.4bn koruna (EUR55.75m or $US87.79m) on improvements around two Skoda Auto plants with an eye to enticing parent company Volkswagen to select them for major new investment.

The Czech government on Wednesday said it would spend 1.4bn koruna (EUR55.75m or $US87.79m) on improvements around two Skoda Auto plants with an eye to enticing parent company Volkswagen to select them for major new investment.

According to Agence France-Presse (AFP), state cash would be used to improve roads and infrastructure around Skoda Auto’s biggest domestic car plant at Mlada Boleslav in the centre of the country and at its northern Vrchlabi factory, where there are high hopes that Volkswagen will give the green light to expand the plant and manufacture its new Up model there.

“Skoda Auto last year announced plans to get Volkwagen’s agreement for further investments of billions of koruna into its Czech plants,” the government was quoted as saying in papers published ahead of the regular cabinet meeting.

AFP noted that Skoda announced plans in April to double production to around 1.5m cars within 10 years, a move which counts on boosting output at domestic and foreign plants.

Production last year reached 661,000 cars with 630,032 cars delivered, a 14.5% rise compared with 2006.

Skoda has a joint venture in China and assembly plants in India, Ukraine and Russia that are dependent on Czech produced parts, Agence France-Presse added.

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