While the automotive industries in most European countries are floundering and large concerns are laying off staff in order to overcome the new challenges, the Czech Republic is making progress. In 2024, the country produced 1.4 million vehicles, which is an absolute record. The Czech Republic is thus becoming the only country in Europe where car production is growing, reports the German public broadcaster ARD.
"Skoda" - a success story
"The Czech Republic is a classic industrial country," says Christian Rümkorf from the German-Czech Chamber of Industry and Commerce. "This actually dates back to the time of the Habsburgs. But the automotive industry is extremely important. The Czech Republic has really well-trained engineers."
The country can boast an almost 120-year tradition in car manufacturing, and in particular its own brand "Skoda". This means that it has been in the business almost as long as Germany. Today, this is joined by the large plants of "Hyundai" from South Korea and "Toyota" from Japan. "All the important large suppliers of car parts are here, some of them with several plants", says Gerrit Schulze, Czech director of the federal investment promotion agency Germany Trade and Invest.
A stable economy, but also a decline in investment
But the automotive industry is not the only sector in which the Czech Republic is performing better than many other European countries. The country's economy is growing by two percent - twice the average for the European Union. Unemployment in the country is extremely low - around 2.6% according to official figures. Even state finances are in good shape. The fact is that the Czech Republic has managed to become one of the leading industrial countries in Europe.
Yet not everything is rosy. Christian Rümkorf sees problems with investment. "Investment has been falling for years. As many as 43 percent of industrial companies plan to invest less in 2025. And this, of course, threatens competitiveness in the long term."
When Germany sneezes, the Czech Republic gets sick
The country is also heavily dependent on the German economy - a third of Czech exports go to the Federal Republic. Gerrit Schulze describes it this way: "The Czech economy always says: when Germany has a cold, the Czech economy gets the flu."
This means that the problems of the German economy also slow down the Czech Republic. That is why the Eastern European country has long been trying to penetrate new markets, especially in Asia - for example with "Skoda" in Vietnam and India.
Lower wages than the EU average
At the same time, people in the Czech Republic continue to earn less than the average income in the European Union. The average gross salary is around 1,500 euros per month.
Gerrit Schulze believes that this will change. However, this requires the development of high technology: "This is simply not possible with ordinary warehouses or conveyors, as were built in the past in the Czech Republic. To do this, the Czech Republic needs more high technology, more added value, and it actually has quite good prerequisites for this."
Is a political turn coming in the country?
The country could also make a political turn - the parliamentary elections to be held on October 3 and 4 could lead to a change in power. The right-wing populist ANO party of former Prime Minister Andrej Babis is leading in the polls, while the centrist liberal "Spolu" coalition of Prime Minister Petr Fiala remains in second place.
However, experts do not expect major economic changes. Christian Rumkorf says: "There is a really broad consensus in the Czech Republic for open markets, for EU integration and a favorable investment environment. "That probably won't change," he says.
Even after the elections, the Czech Republic will remain an industrial country in the heart of Europe - with opportunities but also challenges for the future, summarizes Alina Laimbach from ARD.
Author: Alina Laimbach (ARD)