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Global

In the last decade the global economy was driven by consumption in several countries, especially the United States. However, this consumption was based on the unprecedented expansion of borrowing and indebtedness, which was additionally supported by cheap imports of goods and financing from Asia. The extreme loosening of monetary policy was one of the main causes of the global financial crisis, which initiated the economic crisis. In 2009, the global economy was fully mired in the financial crisis – the problems of banks brought about a substantial decline in GDP. The automotive industry was also very badly affected by the global economic crisis. Practically all major brands were forced to contend with double-digit falls in sales, which had the consequence of declining earnings and employment at the companies with a resulting multiplier effect for suppliers.

The American economy declined by 0.7% in the second quarter, which was a substantial improvement in comparison with the first quarter (−6.4%). The upswing in the American economy is the result of budgetary stimulus measures and improvement of the situation in the financial sector. Economic growth in the United States at the close of the year was driven by reserves and government programmes aimed at supporting the economy. Despite certain signs of possible recovery, however, the negative effects of the crisis remained, especially rising unemployment. Many central banks cut key interest rates to historically unprecedented lows, with the United States going so far as to lower the key interest rate to zero.

Czech Republic

In the third quarter of 2009, the Czech Republic recorded a year-on-year GDP decline of 4.1%, whereas in the previous quarter GDP had actually risen by 0.8%. The key growth factor was foreign trade, which in 2009 reached a record surplus. (Exports were substantially aided by the introduction of scrappage programmes, whereas imports were dampened by falling domestic demand). Conversely, gross capital formation declined very dramatically and remained significantly below expectations. From the beginning of the year, the Czech National Bank (CNB)

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rate in November reached 0.5%, while the average year-on-year rate of inflation in December was 1%*. The exchange rate of the koruna against the euro also had a significant effect on the Czech economy. In comparison with the end of 2008, when the Czech koruna traded at CZK 27/EUR, in the first two months of 2009 the koruna markedly weakened against the euro to just under CZK 29.50/EUR. From March, the koruna gained strength, reaching a level above CZK 25/EUR. In the last months of 2009, the koruna distinctively weakened and at the end of the year the koruna was around 26.50 CZK/EUR. The number of unemployed rose continuously and by the end of the year had exceeded the half-million mark (8.6%). Another unsettling factor was the rapidly growing national budget deficit, which, in 2009, greatly exceeded 3% of GDP (estimated at over 7%), the limit set forth in the Maastricht criteria for adoption of the common European currency.

Europe

The crisis also fully impacted the countries of the European Union. A significant decline in exports occurred which had a very negative effect on the pro-export European economies. In comparison with the previous quarter, the first quarter of 2009 saw a 2.4% decline in GDP in the countries of the European Union, though in the second quarter GDP declined by only 0.2%. Thus, in the second quarter most European Union countries found themselves in a stabilisation phase, whereas some of them exhibited a slight growth trend. In the third quarter, the German economy grew by 0.7% quarter-on-quarter and thus emerged from recession. In 2009, German GDP declined by 5%* overall against the comparable period. Because Germany is the largest economy in Europe, its results to a certain extent determine the results for the entire region. These improving outlooks were in large part due to economic–stimulus measures, which brought about greater government spending and household consumption. However, investment activity continued to be very weak.

GDP growth in the Czech Republic (%)

2009 * 2008

2007

Development of Exports

of the Czech Republic (CZK billion)

Total of which Škoda Auto

0 500 1,000 1,500 2,000 2,500 3,000 2009 * 2008 2007 * estimated −6 −4 −2 0 2 4 6 8

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in sales were recorded especially in North America and Central and Eastern Europe. Conversely, positive development continued in Asia. Whereas Western Europe stagnated, global automobile production declined in the monitored period by 13.2% to a total of 60.0 million vehicles, of which 49.4 million were passenger cars (2008: 69.2 million/57.5 million vehicles).

Czech Republic

The growth trend in the domestic passenger-car market of previous years came to a halt in 2009 when the market in the Czech Republic recorded an 8.3% year-on-year decline in registrations of new passenger cars, with total sales of 168,000 units. Demand for light utility vehicles fell by 35.9% in 2009 to 13,084 units, though this decline was largely due to a change in the VAT-deduction methodology. The passenger car market was also affected in 2009 by imports of used vehicles, 144,600 of which were registered during the year (year-on-year –37.4%). Despite this, the share of used vehicles in total registrations reached 46.3%.

Central Europe

Most markets in Central Europe recorded a decline in 2009. A total of 739,000 vehicles were sold in the region, which represents a decrease of 16.5% in comparison with 2008. Compared with the previous period, the Polish market stagnated with sales of 320,000 automobiles. In the monitored period, the market declined in Croatia (total sales of 43,500 vehicles, –49.3% year-on-year), Hungary (78,000 vehicles sold, –50.8% year-on-year) h 69,2 mi

And there were many other persistent negative factors, such as deflation, which lowered consumer prices over several consecutive months. Despite signs of a possible recovery of the European economy, unemployment continued to rise, reaching a ten-year high in excess of 9%* in the European Union as a whole.

Asia and overseas

The global economy was kept afloat in 2009 by Asia, with China in the forefront, while some countries in Latin America (especially Brazil) and the Middle East showed signs of stabilising. Even though China’s GDP grew at its slowest rate of the past several years, it still rose by more than 8%*. The effect of loans hitherto provided was offset by significant growth in industry and domestic consumption. A positive sign is that loans were often used for projects where a strong multiplier effect was anticipated. Domestic consumption was very strong in China, though exports declined sharply due to the recession in the United States, Japan and Europe. India also achieved economic growth of more than 5%* in 2009, though not even this was enough for the global economy as a whole to achieve growth in 2009.