Vendors face swelling costs at a time of significant weakness. The Association of the Automotive Industry (AutoSAP) expects up to three hundred thousand unproduced cars to fail this year. This represents approximately 260 billion crowns of sales that would otherwise land on the accounts of small and large car companies.
“Lack of raw materials, logistics problems and limited human resources are significantly pushing up prices for virtually all inputs. Rising costs are reflected at all levels of the supply chain, and the problem thus affects the entire market, and for most companies it is no longer tolerable to absorb rising costs, “says AutoSAP CEO Zdeněk Petzl.
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Škoda Auto only wants to sell electric cars! What changes are planned? • VIDEO Videohub
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Energy is one of the biggest pains of suppliers. If electricity and gas prices remained at the current level next year, the České Budějovice engineering holding Motor Jikov would lose 60 million crowns. “It simply came to our notice then. Foundries have risen in price by half, and we must behave in the same way. We try to increase prices for all customers by up to twenty percent, “says Miroslav Dvořák, CEO and co-owner of the company.
Supplies for the Swedish truck and bus manufacturer Scania are crucial for his company. Although the price negotiations are demanding, the carmakers will not “pressure” the pressure. “They are afraid that they will have anything to do with it. The entire supply chain has completely disintegrated for them, ”adds Dvořák.
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In an effort to correct inflation, the Czech National Bank has repeatedly raised interest rates. This also makes loans to suppliers in the automotive industry more expensive. For example, the Jikov company wants to increase the share of its euro loans to koruna loans. It now owes about half a billion crowns, half of which is in the common European currency.
Koyo Bearings, which has plants in Olomouc, Pilsen and Pardubice, is also experiencing an unpleasantly steep rise in costs. It is pushed mainly by steel, aluminum, plastics and energy. The leading manufacturer of automotive bearings falls under the Japanese concern JTEKT, which produces car parts in Europe. In Europe, the group has fifteen plants, which increased costs due to higher prices by tens of millions of euros, ie higher hundreds of millions of crowns.
“The percentage increase in some costs reaches hundreds of percent,” says Petr Novák, Planning Director of the JTEKT Evropa Group.
“We can pass on half of the increases to customers, we have to pay the other from our own profit. Many domestic suppliers are balancing on the edge. If they can’t pass the price on to customers, they don’t have to survive, “warns Novák. Smaller companies in particular find themselves at risk, which pays hard for the cost-saving steps of cars as final manufacturers.
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They often focus on producing the most expensive cars with the highest margins at the expense of smaller cars. The largest Czech player, Škoda Auto, for example, prefers the production of the flagship electric car Enyaq or the more expensive SUV Kodiaq or Karoq.
“Lower model lines, on the other hand, are dampening carmakers. Suppliers are fully dependent on their plans. We have no leverage to pass on inflationary pressures to final producers, “adds Novák.
The manufacturer of parts Isolit-Bravo from Jablonné nad Orlicí pays up to a fifth for aluminum, copper, iron or electricity. “We have not raised the price yet, because our automotive customers are resisting this. But there is no other option, and if we do not agree with some, we will say goodbye to them, “explains the owner of the company and one of the richest Czechs, Kvido Štěpánek.
Piston Rings Komarov increases piston rings by up to ten percent more. “We expect further price increases. We hope that they will stabilize in the second half of next year, “says Petr Mašek, the company’s CEO.
“Manufacturers of headlights and car batteries are more expensive. Of course, this has a direct impact on the final prices of new cars. Only Škoda Auto has risen in price for the second time this year, “recalls Igor Sirota, a spokesman for the Central Automobile Club of the Czech Republic.
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Prices in the latest Czech price lists of Škoda Auto have increased by up to 45,000. For example, the Octavia has risen in price by 25,000 and has now exceeded half a million. The Enyaq electric car rose by 35,000.
The carmaker argues about rising costs and does not rule out further price increases next year. In an interview with the E15 daily, its chairman Thomas Schäfer said that the company had reduced fixed costs by more than half a billion euros since the outbreak of the pandemic and that it was looking for further savings in so-called specifications.
“If it is specified too narrowly how the part should be created, it leads to its price becoming more expensive. For example, if we say that you only have to use chrome from Russia to make a part, the price increases. For example, we are now working on the successor to the Superb model, where millions of euros can be saved by simplifying specifications, ”said Schäfer.
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