Outages due to coronavirus will no longer be compensated, reports Škoda Auto

The Mladá Boleslav-based carmaker Škoda Auto delivered 721,900 cars to its customers in the first three quarters of this year. This is a year-on-year decrease of 21 percent. The reason for the decline was a significant disruption of markets, together with production outages, caused by the closure of Czech production plants for 39 days in the second quarter, due to the coronavirus pandemic. These outages will not be able to be replaced in the Czech Republic by the end of the year, the carmaker said in a press release on Friday.

The company expects production restrictions resulting from the consequences of the coronavirus pandemic. These production restrictions mean, for example, that employees have longer breaks, unions are struggling to cancel overtime or extra shifts, so some of these shifts did not take place in October.

In September, the carmaker delivered a total of 104,600 cars to customers, which was a year-on-year increase of 2.6 percent.

Škoda Auto’s operating profit fell by 60 percent to 469 million euros (12.9 billion crowns) in the first nine months of this year. The negative impact on the economy was mainly due to lower sales volumes caused by the covid-19 epidemic, the development of exchange rates and also extraordinary expenses related to emissions. These impacts were partially offset by lower fixed costs and the costs of developing and optimizing product costs.

“The financial results for the third quarter prove that our maximum cost discipline pays off. The additional short-term program, which reduces costs and capital expenditures, as well as measures to optimize current assets and liquidity, are also effective, ”said Klaus-Dieter Schürmann, Member of the Board of Directors. According to him, the company continues to monitor the current situation and takes further steps to eliminate the financial impact of ever-tightening government measures to prevent the spread of coronavirus.

Last year, Škoda Auto delivered 1.24 million cars worldwide. It operates three production plants in the Czech Republic, produces in China, Russia, Slovakia and India, mostly through group partnerships, as well as in Ukraine and Kazakhstan in cooperation with local partners. It is active in more than 100 markets. It employs almost 39,000 people, of which almost 34,000 in the Czech Republic.

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