Profit at the largest Czech exporter, Volkswagen unit Skoda Auto, sank 61.7% and revenue fell 19.7% in the first half, mirroring a fall in the country's manufacturing sector.
The Czech Republic, like other export-dominant economies in central Europe, fell into recession in the first part of the year and is waiting for a pickup in western demand for its cars and electronics to help reset the economy.
Skoda said on Thursday the sales drop slowed from April to June on the back of car scrapping subsidies for new car purchases that lifted demand for the brand's cheaper cars in western markets, like in neighboring Germany.
“However, this positive impulse is time limited,” Skoda board member Holger Kintscher said. “Outlooks therefore remain uncertain and laden with risks.”
Skoda's profit after tax fell to 2.7 billion crowns ($148.8 million) in the first six months of the year, from 7.2 billion a year ago, and revenue dropped to 89.7 billion crowns.
Skoda's parent VW reported an 83% fall in net profit in the second quarter, while French carmaker Renault fell to a net loss in the first half as carmakers fought to cut costs to counter more than 20% drops in car sales in some European markets. (Reuters)