Volkswagen's Skoda Opens Technology Center

Company says research and development are more important than ever during a crisis.

Volkswagen's Czech unit Skoda Auto on Dec. 16 opened a technology center worth 45 million euros (US$61.5 million), which it sees as a way to beat the crisis crimping the car industry worldwide. "Research and development are more important than ever at a time of crisis," Volkswagen board chairman Martin Winterkorn said at the opening ceremony in Mlada Boleslav, northeast of Prague.

"I am convinced that Volkswagen and Skoda will emerge from this crisis stronger," said the head of the German car giant which will use the center too.

The new center will offer 300 new jobs at a time when Skoda has dismissed 1,500 external staff and plans to cut another 2,000 early next year over the crisis. In the next few years, Volkswagen expects to invest millions of euros in the facility that comprises engine, airbag, light and crash-testing centers.

Skoda chairman Reinhard Jung said the company would introduce the offroad Skoda Yeti and the Skoda Superb estate model next year, despite the crisis that has slashed demand especially for big cars such as Superb.

In January-September, Skoda Auto reported a net profit of 8.66 billion koruna,(US$456 million), down 24.7% over a year earlier, with revenue down 2.2% even though unit sales jumped 14.8% to 530,924 cars.

But Jung said the full-year sales growth would slow down to 7% from a 14.5% increase in 2007 after Skoda had cut production because of low demand several times this year. The company expected to produce 759,000 cars in 2008, up from 661,000 in 2007, but the shutdowns will slash the number by at least 31,000.

Last week, the carmaker said it would cut the working week to four days throughout the first half of 2009.

In 2007, Czech factories led by Skoda Auto and the French-Japanese grouping TPCA (Toyota-Peugeot-Citroen) produced cars worth almost 641 billion koruna, US$35.6 billion), equivalent to some 18% of the country's gross domestic product.

Copyright Agence France-Presse, 2008

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