C BLI U H REP C ZE CZECHC REPUBLIC AutomotiveAutomotive IndustryIndustry

TheThe Czech automotive industrindustryy representsrepresents one the most developeddeveloped automotiveautomotive markets in the CEE region.region. Based on its longlong tradition and technical know-how, the CzechCzech automotiveautomotive sectorsector succeeded in transitioningtransitioning into a European advanced automotive base while maintainingmaintaining its attractive quality/pricequality/price ratio. This is evident in the factfact that in 20102010 annual production ofof passengerpassenger exceededexceeded oneone millionmillion unitsunits forfor thethe fi rrstst timtime.e. REASONS TO INVEST IF R&D IS WHAT YOU NEED IN THE The modern history of the Czech ► Strategic position in , direct boasts not only production successes but also access to the EU market of 500 million outstanding results in the fi eld of automotive consumers research and development. Based on the well- ► Stable business and political environment – established automotive market and high-level EU and NATO membership technical education with one of the world’s largest ► Well-developed transport and proportions of graduates, numerous R&D companies telecommunications infrastructure have established branches here. The more than ► Highly developed technical base thirty R&D companies that utilise the potential ► Highly educated workforce, good access of the local industrial tradition and highly skilled to university graduates with technical education engineers include Porsche Engineering Services, ► Strong innovation potential for R&D projects Mercedes-Benz Technology, Ricardo, Idiada, Swell, ► Positive approach of the Czech government, Aufeer Design, Valeo, Visteon, Bosch, Continental, investment support covering up to 60% of eligible Honeywell, Siemens, TRW, ZF Automotive costs through a transparent system of investment and many others. incentives Many technical universities and their R&D centres, ► First-class support from CzechInvest such as Josef Božek Research Centre of Engine and Automotive Engineering at Czech Technical University in Prague and other technical universities BASIC FACTS in Plzen, Liberec, Pardubice, , Zlín and closely cooperate with these companies, providing The Czech automotive sector is largely based them with the workforce and know-how they need. on three carmakers, namely Škoda Auto ( Group), Toyota Citroën Automobile (TPCA) “What convinced us was the quality of Czech and Hyundai Motor Manufacturing Czech (HMMC). engineers and the long automotive tradition These producers draw resources from in the Czech Republic. For this reason we can a well-developed supplier network which includes promise further improvements in our results fi rms such as Benteler, Bosch, TRW Automotive, and achieve competitive prices.” Denso, Magna, Continental and many others. Clive Hickman, In 2010, overall production of passenger cars Managing Director, Ricardo Vehicle Engineering exceeded one million units. The automotive industry employs more than 260,000 people and accounts for more than 20% of both Czech manufacturing PRODUCTION FACILITIES output and exports. The Czech automotive industry has a strong manufacturing base. But the sector consists of more than just the passenger- segment. Heavy- R&D and Technology Centres 2003-2011 and medium-duty , buses and motorcycles Number of companies Number of projects are also manufactured here. Heavy-duty trucks are manufactured mainly by the company 10 UK 12 Tatra, which is one of the world’s oldest vehicle manufacturers. Avia produces medium-duty trucks 8 Czech Republic 8 in the city of Prague and was acquired by an

5 Hungary Indian company, Ashok Leyland, in 2006. Bus 10 manufacturers include Irisbus Iveco (the former 4 Czech company Karosa), SOR Libchavy, Tedom, 5 Ekobus and Evobus, a Daimler Buses subsidiary. 4 Romania 8 “The Czech Republic attracted us mainly by its 2 2 remarkable engineering tradition and high level of technical education. This is what we looked for. 1 Russia 1 We are also very satisfi ed with the quality of the *Incomming R&D Projects in Selected Countries local component manufacturers.” Source: fDi Markets, 2011 Jean-Martin Folz, President of PSA Peugeot Citroën

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Tatra’s Präsident Launch of car The Prague 200,282 model is the production at Autosalon is motor vehicles fi rst passenger the company ranked as the registered in car produced in Laurin & Klement third-largest . Central Europe company (later automotive fair Top carmakers subsidiary of in Europe after include , the Škoda Auto Paris and London Tatra, Škoda and group) Aero INVESTMENT CASE STUDY CZECHINVEST’S SERVICES Škoda Auto (Volkswagen Group) ► Full information assistance The entry of the German Volkswagen Group into ► Tailor-made visits Škoda Auto did not mean only signifi cant adjustments ► Maximisation of networking capacity to the latter’s production and know-how but also ► Handling of investment incentives changes in awareness of the Škoda Auto brand, which ► Access to EU structural funds is improving every year. Since 1991, when Škoda Auto ► Business properties identifi cation became the fourth brand of the Volkswagen Group, ► Business infrastructure development the Czech carmaker expanded its operations not only ► Supplier/JV/acquisition partner identifi cation in its three production facilities in the Czech Republic but also in its foreign production and assembly plants in Russia and India, and also in its partner factories EDUCATION SYSTEM in China, India, Kazakhstan, Slovakia and Ukraine. The Czech Republic offers high-level technical Škoda Auto has further enhanced its activities education at several technical universities evenly in the Czech Republic. Besides opening a design distributed across the country, with more than centre, Škoda Auto established a technology centre 80,000 students majoring in technical or science- in Mladá Boleslav in 2008 that delivers R&D solutions related fi elds. for the entire Volkswagen Group. Over 17,000 graduates enter the workforce every year and the number of technical graduates INVESTMENT CASE STUDY increases by hundreds each year. Hyundai – the most modern car manufacturer Apart from universities, the Czech education system in Europe features other sources of skilled labour, including Another success story began with the announcement specialised four-year secondary schools whose of a EUR 1 billion investment in Nošovice, Moravian- students graduate with the near equivalent Silesian Region, in 2006. Over the course of 18 months, of a university bachelor’s degree. the Korean car manufacturer Hyundai Motor Company built here its fi rst production facility in Europe, which according to expert opinion is the most modern GraduatesGraduates in Technical Universities car factory in Europe. The facility produces four studentsstudents passenger-car models in the compact, MPV and SUV graduatesgraduates segments. Upon initiation of three-shift operation in autumn 2011, the maximum capacity of Hyundai Motor 3737 333333 2001/20022001/2002 Manufacturing Czech has risen to 300,000 cars per year. 3 941 4141 567 22002/2003002/2003 4 257

R&D CASE STUDY 4848 302 22003/2004003/2004 4 731 Porsche Engineering Services Porsche Engineering is a top-quality 52 070 22004/2005004/2005 5 485 and engineering services provider. From the concept phase to series production, Porsche Engineering 56 712 22005/2006005/2006 6 397 supports its customers in the development 62 975 22006/2007006/2007 of components, systems, modules and complete 8 397 vehicles. Porsche Engineering in Prague specialises 65 562 in complex technical calculations and simulations 11 876 22007/2008007/2008 and will expand its competencies in related business 66 304304 areas. Thus, it contributes to the integrated engineering 14 198 22008/2009008/2009 services of Porsche Engineering worldwide. Through 8282 245 the establishment of its Prague branch in 2001, Porsche 17 109 22010/2011010/2011 Engineering participates in the vibrant Czech market. Note: According to the educational fi elds selected byby CzechInvest.CzechInvest. Highly-qualifi ed engineers and an interesting market HigherHigher number ofof students and graduates in academic yearyear with growing technical requirements make the Czech 2009/20102009/2010 caused byby differentdifferent methodology.methodology.

Republic a perfect location for advanced engineering Source:Source: Institute fforor InInformationformation on EducationEducation,, 20112011 services.

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Joint-venture Launch of Launch of Annual partnership production production at production of between Škoda at Toyota Hyundai Motor passenger cars Auto and Peugeot Citroën Manufacturing in the Czech Volkswagen Automobile, Czech, Republic exceeds Group Kolín Nošovice one million units SELECTED AUTOMOTIVE R&D INVESTMESMENTS AND TECHNOLOGY CENTRES CZECH REPUBLIC

CENTRAL BOHEMIA PLZEŇ REGION SOUTH REGION MLADÁ BOLESLAV PLZEŇ BRNO AUFEER DESIGN Mercedes-Benz technology Honeywell Turbo Technologies Faurecia NARETEC Mann+Hummel Idiada CZ ZF Engineering BLANSKO Mercedes-Benz technology Blata Swell SOUTH BOHEMIA REGION Škoda Auto ČESKÉ BUDĚJOVICE ZLÍN REGION MNICHOVO HRADIŠTĚ Ingersoll Rand VSETÍN Behr Czech Bosch Nippon Kayaku PRAGUE MOSLED Mercedes-Benz technology DAČICE OLOMOUC REGION Porsche Engineering Services TRW-DAS Ricardo Prague MOHELNICE STRAKONICE HELLA KG Hueck&Co. Valeo Systemes Thermiques ČZ a. s. ZDICE Kostal CR MORAVIA-SILESIA REGION HRADEC KRÁLOVÉ REGION FRENŠTÁT POD RADOŠTĚM HOŘICE LIBEREC REGION Continental Automotive Systems Swell Czech Republic LIBEREC JIČÍN KOPRIVNICE Denso Continental Teves Idiada CZ TATRA MSV Systems CZ NOVÝ JIČÍN VYSOČINA REGION JABLONEC NAD NISOU Visteon Autopal Lucas Varity TRW JIHLAVA OSTRAVA Bosch Behr Czech Motorpal PARDUBICE REGION Hayes Lemmerz International OKŘÍŠKY USTI NA ORLICI Mann+Hummel FPOS - MOTO FGR

OUTSTANDING QUALITY OF LIFE The Czech Republic boasts extraordinary quality of life.

The IMD World Competitiveness Yearbook’s Quality of Life Index ranks the country twentieth in the world and fi rst in the CEE region. But one must experience the local cultural heritage, sport facilities and natural beauty to fully grasp the joys of living in the Czech Republic. The country offers a full range of services required by expatriates and their families, including multilingual international schools covering all levels from kindergarten to MBA studies, attractive housing, shopping malls and fi rst-class recreational facilities including over 80 golf courses and 12 UNESCO heritage sites.

DATE OF ISSUE: July 2011

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