Second Colloquium

Future Pact for the Czech Automotive Industry

Future Pact for the Czech Automotive Industry

18. 3. 2019

Colloquium participants discussed specific results and achievements in implementing a plan of action for the future of the automotive industry in the Czech Republic.

On Monday, the second colloquium for the ‘Future Pact for the Czech Automobile Industry’ took place at ŠKODA AUTO’s company headquarters in Mladá Boleslav. At the invitation of the industry association AutoSAP, Prime Minister Andrej Babiš and other senior members of the Czech government met with ŠKODA AUTO CEO Bernhard Maier and other representatives of the car manufacturer. Alongside union representatives, representatives from the automotive, energy and telecommunications sectors, experts from abroad as well as representatives of local authorities, academic and research institutions, they discussed the results of implementing a plan of action for the future of the automotive industry in the Czech Republic. The focus was on digitalisation and electromobility as well as smart mobility, investments in education, research and development.

At the colloquium, ŠKODA AUTO CEO Bernhard Maier emphasised: “ŠKODA is shaping the future of mobility in close collaboration and in open dialogue with all stakeholders. One thing is for sure: to handle the profound changes in the automotive industry and to strengthen the Czech Republic as an automotive location in the long term, effective cooperation between companies and local authorities, the Czech government and the relevant councils is essential.”

Bohdan Wojnar, ŠKODA AUTO Board Member for Human Resources and President of the industry association AutoSAP adds: “The second colloquium on the Future Pact for the Czech Automotive Industry strengthens the positive and constructive communication among politics, the association and the automotive industry. The agreements reached today to implement the catalogue of measures, and the forthcoming appointment of a government representative for electromobility create planning security for the association and industry in the further implementation of our projects.”

The colloquium participants also agreed to collaborate closely in the field of smart mobility. ŠKODA relies on extensive cooperation in this area so that the company can effectively implement the government’s digitalisation programme, Digitální Česko (“Digital Czech Republic”).

For example, in partnership with the Czech Business Agency for Economic Development, a Mobility Innovation Hub will be set up to facilitate communication among experts from the automotive industry, politics and administration. Together, they will develop additional approaches and strategies to establish electromobility sustainably in the Czech Republic.

In addition to electromobility, progressive digitalisation will bring about changes to vehicles as well as the entire automotive industry in the long term. To create the necessary infrastructure, the industry association AutoSAP and the Czech government have agreed to develop the essential charging infrastructure for electric cars rapidly. The association and government representatives have also committed themselves to comprehensively improving Internet and data connections to be able to take full advantage of the multitude of possibilities and services that result from the increasing digitalisation of the automotive sector.

ŠKODA is actively pursuing the implementation of specific measures in the areas of electromobility and digitalisation as part of its Strategy 2025. The electrification of the model range will start this year, making 2019 an extraordinary milestone in the company’s 124-year history. The ŠKODA SUPERB with plug-in hybrid drive will roll off the production line in Kvasiny. The car manufacturer is also presenting the all-electric version of the ŠKODA CITIGO. Next year, the Mladá Boleslav plant will produce battery-electric vehicles based on the Volkswagen Group’s Modular Electric-drive Matrix (MEB).

At the DigiLab in Prague and the spin-off of the innovation workshop in the start-up hotspot of Tel Aviv, ŠKODA is also working intensively on new mobility services that the company is gradually bringing onto the road and to their customers’ devices. With HoppyGo, ŠKODA has become one of the largest providers of peer-to-peer car sharing in the Czech Republic. With Care Driver, the manufacturer is testing a driving service for children, senior citizens and people with disabilities. And Uniqway is a new car-sharing offer for students.

In total, ŠKODA will have invested around two billion euros in alternative drive technologies and new mobility services by 2022, making it the most comprehensive investment programme in the company’s history.

16 February 2017 - At the ‘Colloquium on the Future of the Automotive Industry in the Czech Republic’, which was held at ŠKODA’s headquarters in Mladá Boleslav, high-ranking government representatives, representatives of the Czech Automobile Association, the trade union organization and the Czech economy set the course for the sustainable success of the Czech auto industry. Alongside Czech Prime Minister Bohuslav Sobotka (ČSSD), several ministers and other government members, as well as the mayor of Prague, Adriana Krnáčová, took part in the auto summit, organized by the Czech government and the Association of the Automotive Industry AutoSAP. One of the most important decisions at the event was the planned development of a ‘Pact for the Future of the Automotive Industry in the Czech Republic’, which is to be adopted in the middle of this year.

“The future of the automobile has begun,” said ŠKODA CEO, Bernhard Maier. “We are operating on a solid foundation and the advantage of being located in the Czech Republic is the envy of many. Now it is important to protect our existing strengths, while building and developing new ones. That is why I welcome the fact that together – politics, the automobile industry and the economy – we are drawing up a ‘pact for the future of the automotive industry in the Czech Republic’,” Maier continued. To this end, the participants of the auto summit – including representatives from the fields of politics, the automotive industry and other industries, alongside experts from universities and renowned research centres – will present specific measures and proposals by the middle of this year.

One of the core messages of the colloquium, which ŠKODA hosted, was: In addition to industrial production, services and digital technologies will increasingly shape the face of the economy in the brand’s home country. This change also bring important future issues and opportunities for the automotive industry, which is one of the pillars of the Czech economy. The automotive industry contributes nine percent to the gross domestic product of the Czech Republic, and is one of the most important employers – directly employing more than 150,000 people. In addition, there are hundreds of thousands of jobs in the supplier industry. The automotive sector accounts for 25 percent of all Czech exports. Well over half of all passenger cars produced in the Czech Republic car (around 57 percent) rolled off ŠKODA’s production lines in 2015. The traditional brand is the largest car manufacturer in the country and is represented in more than 100 markets around the world. ŠKODA has established itself as a successful volume brand in many locations. In 2016, the company produced more than one million vehicles for the third time in a row.

The summit participants discussed effective strategies to shape the change in the Czech automotive sector actively and sustainably. It was agreed that significantly higher investments in education and research & development are needed to ensure the competitiveness of the entire industry in the long term. Background: At present, Czech gross domestic product (GDP) is growing faster than investment in research and development. Two percent of GDP currently flows into this sector. The share of funding for education in the Czech Republic amounts to 4.4 percent of GDP. In the Czech Republic, the automotive industry is the largest investor in research & development at 24 percent. Taking into account the mechanical and electrical sector, this figure adds up to more than 50 percent.

The new business areas of electromobility, autonomous driving, increasing digitization and innovative mobility solutions offer great potential. In surveys, more than half of Czechs expressed their interest in purchasing an electric vehicle and modern connectivity solutions. 30 percent said they consider buying an autonomous vehicle. This creates great potential for the Czech automotive industry. To fully exploit this and to master the forthcoming transformation processes successfully, ŠKODA proposed specific measures to the government representatives. For example, solutions for smart cities and digitization can be promoted, among other things, by the establishment of a nationwide broadband network. Autonomous driving will be supported by a national strategy, targeted funding for research & development and by installing a test corridor. The latter could link the ŠKODA headquarters in Mladá Boleslav to the cities of Prague, Plzeň, Rozvadov and the German metropolis of Nuremberg. In addition, ŠKODA proposed the reorientation of the National Plan for Clean Mobility, as well as the establishment of a consultative body at a government level for the rapid expansion of electromobility. Another important point was special customer incentives for electric cars.

With strategy 2025, ŠKODA has already set its own milestone plan for the technological change and the company’s long-term growth. The strategy sets forth the traditional Czech company’s plans to grow in two dimensions: Vehicle sales will consistently increase, while new business areas for innovative mobility services will be established. An integral part of this forward-looking strategy is the new DigiLab in Prague, which aims to strengthen the company’s innovative- and digital-development expertise.

The automotive industry is an important pillar of the Czech economy
With consistently positive economic development, the domestic automotive industry has underscored its importance for the entire country for several years. For example, the sales of all companies organized by the AutoSAP Association increased by 7 percent to CZK 912 billion between 2014 and 2015. Exports rose by 7.2 percent to CZK 780 billion in the same period. In 2015 the automobile industry in the Czech Republic achieved a new historical record with a total of 1.3 million vehicles produced. While production volumes rose by only 1.1 percent worldwide, they rose 4.2 percent in ŠKODA’s home country. As a result, the automotive industry made a major contribution to the economic growth in the Czech Republic, which reached 4.6 percent in 2015. For the current year, the Czech National Bank expects a GDP increase of three percent.

With more than 26,000 employees, ŠKODA is one of the largest employers in the Czech Republic. A further 150,000 people are employed by the manufacturer’s suppliers. Since 1991, the company has invested over CZK 350 billion into manufacturing processes and the local factories in Mladá Boleslav, Kvasiny and Vrchlabí.

In addition, the high wages in the Czech automotive industry, which are around 26 percent above national average, are boosting domestic demand and having a positive knock-on effect on the state budget. This is also true of the low unemployment rate, which reached one of the lowest rates in the European Union in 2016, at just 5.2 percent.

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