Czech prowess in manufacturing skills can partly be attributed to the country’s Communist past says the country’s Automotive Industry Association’s secretary-general.
The former Czechoslovakia was under the tutelage of the Communist yoke and directed from the Soviet Union for 40 years, but one of its more fortunate legacies was the provision of an education system, which has survived through the upheavals of first democracy and then the country splitting in two.
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“We have challenges in Central and Eastern Europe (CEE) regarding the labour force, so this is one of the issues we are trying to help with,,” Czech Automotive Industry Association secretary-general, Zdenek Petzl told the recent CEE Automotive Forum in Prague.
“We had a very good education system back in the Communist time. Now we see an [automotive] industry which is a real driving force – we need it. We directly employ 150,000 people and almost 400,000 indirectly. The ripples are going all the way from the suppliers to the OEMs.”
A high level of education is relatively common to many parts of the Visegrad 4 countries in Central and Eastern Europe: Hungary, Czech Republic, Slovakia and Poland.
However, this has triggered its own issues as suppliers and OEMs have flocked to the region keen to capitalise on a skilled workforce coupled with a competitive wage structure, albeit one whose star is waning as salaries rise to cope with labour pressure.
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By GlobalDataDespite that, the Czech Automotive chief nonetheless sees opportunities for suppliers in the country as the European Commission (EC) imposes ever-tighter regulation on CO2 emissions, which recently saw even more ambitious targets outlined.
“There is a significant role played by suppliers [here],” added Petzl. “The EC will come up with its new impact on CO2 and from 2021 we have this 95g for passenger vehicles.
“This new framework will shape it from 2025-2030. Obviously in the industry where every LED and every rear lamp is counted, every change in regulation is very significant.
“Current challenges are lack of employees…and missing infrastructure. There is pressure on wage growth, pressure on suppliers, risk for small suppliers, a push for further mergers.”
Also present at the CEE Automotive Forum was Czech Association for Foreign Investment chairman, Kamil Blazek, who noted the country’s geographic advantages being so close to major German plants.
Czech Republic has 22 production sites within 400km of Prague and 800 automotive suppliers, representing a hugely significant 7.5% of domestic GDP.
“In ten years we will not recognise the landscape and how the industry is producing cars or other products,” noted Blazek. “We need to work and make this country competitive in a European context.
“We need to plan the educational system so it focus on know-how and not [just] knowledge. “Investing in the automotive industry is one of the good ways to invest money. It is not just about automotive – it will pay off in other areas.”
