PRAGUE -- Skoda restarted production on Monday in the Czech Republic as the auto sector faces a shaky relaunch with the coronavirus outbreak hitting demand for cars.
The car industry accounts for a tenth of the country's economic output, a quarter of exports and 150,000 jobs but looks set to run well below capacity in 2020.
Skoda, part of the Volkswagen Group, shuttered its operations in March as the number of coronavirus cases in Europe began to accelerate but is now restarting as the central European country of 10.7 million loosens some restrictions.
The group builds Skoda and Seat badged cars together with electric motors and components at its plants in Kvasiny and Mlada Boleslav, according to Automotive News Europe's Assembly Plant Map.
On Monday, Czech shops up to 2,500 square meters and places such as fitness centers reopened under the government's phased plans.
Skoda workers returned wearing masks and were subject to temperature checks, part of 80 new company measures from hand sanitizing stations and expanded break areas to extra time for cleaning workstations.
Around 90 percent of Czech automotive companies have shut or limited output since March. Nearly all should resume in the coming weeks, the Automotive Industry Association (AutoSAP) said.
A 36 percent drop in production last month cost automakers and suppliers 67 billion crowns ($2.68 billion) in revenue, AutoSAP said. Its director, Zdenek Petzl, said almost all April production would be lost before a return to 60 percent of capacity in May.
Petzl estimated sector output would hover at 60-90 percent of capacity this year.
"The beginning of the restart will be pretty shaky," Petzl said. "The biggest fear is... what markets are going to do."
Around 4,000 jobs, mostly agency workers, have been lost so far while 42 percent of companies are considering layoffs, AutoSAP said.
Koyo Bearings Czech Republic, part of Japan's JTEKT Corporation, relaunched this month after a two-week outage. Production has run at between 10-90 percent each week since the start of April, with 60 percent of normal capacity planned for this week, company president Petr Novak said.
With plans made on a week-to-week basis, the company leaves some of its 500 staff at home under a new state short-term work scheme, similar to the Kurzarbeit system in Germany, and is keen to avoid layoffs.
"The expectation is that the restart and return to normal will be very gradual and we will not realize full (production) volumes until maybe 2021," Novak said.
A bellwether for an economy set to sink 5.6 percent according to finance ministry forecasts, Skoda operates the largest of the central European country's three car plants, which produced 1.43 million vehicles in 2019.
Skoda will also limit production, the unions' weekly newsletter said.
Hyundai's factory in Nosovice started running two of three shifts on April 14. TPCA, a joint venture of Toyota and PSA Group, is reopening on May 4.
