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Škoda to expand local plants

Plans include rollout of new SUV in 2009

By Victor Velek
Staff Writer, The Prague Post
October 3rd, 2007 issue

The Volkswagen-owned carmaker Škoda Auto will expand and modernize its two domestic manufacturing plants in Kvasiny, east Bohemia, and Vrchlabí, north Bohemia, the company announced Oct. 1.
Škoda’s aim is to have the two plants join its flagship facility in Mladá Boleslav, central Bohemia, as full-scale car producers by 2010, said spokesman Jaroslav Černý.
The company has refused to give any estimates concerning the cost of the planned investment. However, the regional government of Hradec Králové, where the two Škoda plants are located, estimated that the investment will exceed 10 billion Kč ($512 million), according to the Czech News Agency.
This added investment comes as Škoda, the country’s largest firm by revenue, announced that production of its newest car model, the Yeti SUV, will take place in the Czech Republic. The SUV should be introduced by the end of 2009.
The enlargement of the Kvasiny plant will allow the manufacturing of the Yeti SUV alongside the Roomster and Superb models, which are currently produced there. The expansion will also add several hundred new jobs, according to Martin Jahn, the Škoda board member responsible for human resources.
Despite vacant manufacturing capacity in Volkswagen’s other European plants, Škoda’s management decided the Yeti should be made locally.
“Placing the production of the Yeti in the Czech Republic is a clear signal that, despite VW having vacant production capacities in other European locations, we are strengthening our position in the Czech Republic,” Jahn said.
Škoda’s other plant, in Vrchlabí, will be readied to produce cars of other Volkswagen brands — Audis, Seats and Volkswagens. According to Jahn, its number of workers will double, reaching some 3,000 staff.
Škoda hopes that the plan to modernize Vrchlabí will be supported by the state and regional government, with public funding addressing the poor transport access that plagues the plant, Černý said.
The Mladá Boleslav factory will continue to focus on the production of the Fabia and Octavia models, the company said. And due to the high demand for Octavias, the Volkswagen plant in Bratislava, Slovakia, will begin producing extra Octavia models in 2008, Černý said.
At the Frankfurt Motor Show in September, Jahn said Škoda’s aim is to produce 1 million cars a year by 2010.
Škoda’s production has been steadily rising over the past few years: In 2006, Škoda plants churned out about 560,000 cars.
“By the end of this year, we plan to cross the 600,000 mark,” Černý said.
Last year, Škoda netted a 11.06 billion Kč profit, and at the end of September announced that it would pay 8.43 billion Kč in dividends to its sole shareholder, Volkswagen.

Victor Velek can be reached at vvelek@praguepost.com


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