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Skoda plans to double capacity in China – report

  Volkswagen’s Czech unit Skoda Auto plans to increase production capacity in China and may make a decision on job cuts in the second quarter, its chairman told a German magazine.

“We want to double our Chinese capacity in 2009 from a range of currently 50,000 to 60,000 units,” Reinhard Jung, head of Skoda Auto, told Auto Motor Und Sport in an interview published on Saturday.

Expanding output in China would be pursued independent of production cuts in its three Czech sites and recently implemented cost saving programs, Jung was quoted as saying. “We hope to see a reversal of the economic trend by mid-year 2009, then we will see whether we have hit bottom yet,” Jung said. He declined to comment on plans to reduce jobs but said: “That’s a subject matter, that I cannot discuss until the second quarter...The overall number of staff will be aligned with development of market demand.”

Skoda employs a staff of around 28,000 worldwide. Jung withdrew the company’s outlook for 2009 late last month due to deteriorating market conditions, arguing a valid forecast for this year was impossible. He said at the time he still expects Skoda to do better than in competitors.

Skoda, the largest Czech exporter and the biggest company by sales, is facing plummeting sales in its main markets such as Spain, Ukraine and the UK. (Reuters)