Skoda Auto to significantly reduce production in Czech Republic

Skoda Auto, a Volkswagen unit and the Czech Republic’s biggest automaker, will “significantly reduce or even halt” production from October 18 until the end of the year over the continued global shortage of chips.

The chip shortage, which has hit automakers worldwide, emerges from a confluence of factors as automakers, which closed plants for two months during the coronavirus pandemic last year, rival against the sprawling consumer electronics industry for chip supplies. A factory fire suffered by Japanese chipmaker Renesas this year is also cited as a reason behind the chip shortage.

“Not even Skoda Auto is able to avoid this global crisis,” said Tomas Kotera, the Skoda Auto spokesman.

These expected production cuts are the biggest in central Europe, and some say this would lead to a cut in Czech economic growth forecasts.