For decades, a Czech car was by definition built by Skoda. But by 2005, when the Toyota and PSA/Peugeot-Citroen joint-venture plant in Kolin opens, the Czech Republic will again have competition in the car assembly sector.
Beyond the direct sales competition within the Czech home market, Skoda and Toyota-PSA will compete for the attention of local suppliers and experienced workers.
The new factory is already tapping into Skoda's supplier base and will potentially take some of its human resources. Some local suppliers have already been selected and are negotiating on prices for specific parts.
The same could happen if Hyundai decides to locate its central European factory within the Czech Republic.
Fueled by this growth in production capacity, the Czech supplier base is continuing to grow. While earlier investment, such as the $230 million (now E195 million) Bosch Diesel spent to establish its Jihlava plant, tended to be German, the latest wave of supplier investment is Japanese. Newcomers such as Sumitomo Light Metal Industries are building near Kolin and in the northwest portion of the country near the German border.
The growth isn't just production. Incoming companies are adding engineering and design staff. Showa began by only producing air conditioning condensers in the Czech Republic, but has since added design staff. French supplier Valeo has opened a design office in Prague, complementing its production facility in nearby Rakovnik. Autopal, a Czech subsidiary of US supplier Visteon, is designing reactive lighting systems.
When VW purchased Skoda a decade ago, it kept the Skoda local design office.