15-05-2009

In Business News today: how production braked in the auto sector; good and bad news on inflation and jobs; a new turn in a massive clean-up tender; Vietnamese skills come to the fore; and the battle over the television tax.

Czech car production down almost a quarter in first three months

Figures out this week showed that Czech production of cars and light vehicles dropped 23 percent in the first quarter of the year to just over 205,000 units. The figures reflect the sharp drop in European demand at the end of 2008 and start of 2009, according to their author the Automobile Industry Association. The biggest drop in output was recorded by the country’s number one car producer Škoda Auto with production almost halving to 96,000 units. Production started to pick up again from around mid-February when scrap allowance incentives started to be offered across the continent. The Czech lower house on Friday backed a scrap allowance for replacing cars at least 10 years old.

Inflation and unemployment set different courses

Czech unemployment and inflation figures hit two-year-records this week - at opposite ends of the scale. The jobless total climbed to a two-year high of 7.9 percent in April from 7.7 percent in March. That takes the total of unemployed ready to take up jobs to just over 445,000. Meanwhile, inflation slipped to an annual rate of 1.8 percent in April from March’s 2.3 percent. This is the lowest level since February 2007. Another statistic on industrial output showed a sixth fall in a row for March, but the pace eased to 17 percent lower compared with a year earlier against a 23.4 percent drop in February.

Massive clean-up tender to be investigated

Photo: European CommissionPhoto: European Commission The new caretaker Prime Minister Jan Fischer has confirmed that he will investigate the so-called Czech tender of the century. The tender to clean up past environmental damage is worth 115 billion crowns. That is about 5.8 billion dollars. The first round of the tender selection at the end of April ruffled some pretty important feathers when it excluded half the original six bidders. These included a consortium including PPF Advisory, part of the PPF empire of the richest Czech, Petr Kellner.

Multinationals target local Vietnamese market

Some Czech businesses are going just that step further to get customers, according to Friday’s edition of the newspaper Lidové noviny. It recounts how many firms are now trying to plug into the spending power of the large Vietnamese community with tailor made ads, promotions and services in Vietnamese. Wholesale chain Makro is offering publicity material in Vietnamese at all its Czech outlets and taking on Vietnamese speakers to communicate with customers. The paper reports how mobile phone companies have honed their promotions and offers to one of the biggest minorities in the country. Many Vietnamese still prefer using their native language although they have been living in the Czech Republic for a long time.

Big tax bill threatens public broadcaster

And finally, a somewhat esoteric battle has broken out between public broadcaster Česká Televize and local tax authorities. They maintain the broadcaster has not properly paid tax on tv licence earnings and must hand over 300 million crowns by the end of the month. The total amounts to around 5.0 percent of the broadcaster’s annual budget. Speculation has surfaced that Česká Televize could have to chop some programmes as a result. The broadcaster is appealing the payment demand pointing out that a tax on what is essentially a tax does not make much sense and has defended its current accounting regime.

15-05-2009