Czech new car sales down by 16% in September as Skoda halts production because of chip shortage

Czech new car sales down by 16% in September as Skoda halts production because of chip shortage
Skoda Auto's main car factory at Mlada Boleslav.
By bne IntelliNews October 11, 2021

Sales of new passenger cars in Czechia in September saw a 16.23% drop in year-on-year terms, mainly as a result of a global shortage of chips and issues with logistics, according to data provided by the Association of Automobile Importers on October 5. Compared to 2019 figures, car sales were by 10.17% lower in September. 

Due to a lack of chips, the segment of imported used cars is doing very well, up by 19.6% at the end of September, to 136,877 cars with the average age 10.5 years sold. 

"Demand for used cars is strong, even record-breaking, clearly showing that there is still interest in buying passenger cars. … Hybrids and electric cars have grown to almost double the level of last year. Estimating the full year in this unclear situation is a question for [the oracle of] ancient Greek Delphi. However, I still believe that with at least some functioning production and deliveries, we could stay within the 5 to 10 percent growth range compared to last year," said EY partner Petr Knap to the Czech News Agency.

The best-selling brand is Czechia's biggest car producer Skoda Auto with 56,074 vehicles sold, down by 1% y/y, followed by Hyundai with a 26% growth to 15,002 cars sold, and Volkswagen with a 31% growth to 14,237 cars sold. Skoda represented 34.65% of all cars sold in Czechia. 

The best-selling models were the Skoda Fabia (12,204 cars), Skoda Octavia (10,556) and Skoda Kamiq (8,921).

Skoda Auto just recently announced it would significantly reduce or completely halt its production at all three plants from Monday, October 18, until the end of this year, as a result of the shortage of chips used in the interior electronic system. 

"The consequences have hit the entire automotive industry hard, with some competing brands already closing their plants completely by the end of 2021. Even Skoda Auto cannot avoid this global crisis. We will also have to significantly reduce or completely stop production from the 42nd calendar week until the end of the year," Skoda Auto communications head Tomas Kotera told the Czech News Agency.

According to Skoda, the shortage of chips is due to a reduction in production by manufacturers in Asia because of the coronavirus pandemic. The last time Skoda´s production lines were halted for a week was at the end of September. 

Kotera noted the company will focus on completing a large number of cars in the pipeline. The number of unfinished cars is in the long term between 30,000 and 50,000. "We expect that semiconductor production will gradually start to ramp up again in the 2H22. The whole supply situation should subsequently calm down," Kotera said.

In 1Q21, sales of new passenger cars in Czechia rose by 9.1% y/y to 161,824 vehicles, down by 15% decline compared to figures from 2019. In 9M21, the total 161,824 new passenger cars were registered in the country, up from 148,319 last year.