IV. CZECH INDUSTRY
CHALLENGES FACING CZECH ENGINEERING Engineering is showing unparalleled dominance in Czech industry. It has a number of sub-sectors, which supply the domestic and foreign markets with products of sizes from a few millimetres to machines weighing several tonnes, in addition to many components used in transport, the power industry, and raw material excavation and mining. Of essential importance is engineering production supplying the entire domestic economic sector, one reason being that it accounts for nearly 60 per cent of total Czech exports.
Besides car making, Czech engineering firms are gaining recognition in other countries with deliveries of highly specialised and technologically advanced equipment, especially in the areas of power generation, transport equipment, and machinery for agriculture and the food industry. Other sectors whose products that have a good reputation in other countries are air conditioning equipment and machinery production. A special chapter is machine tool production - milling machines, machine drills, lathers, etc. The very good reputation enjoyed by this segment of Czech engineering abroad is mainly due to the long tradition of the renowned TOS trademark. To maintain their current markets and to gain new ones and new clients, Czech firms are monitoring the specifics of those markets so as to be able to react flexibly to them and be competitive. This is a challenge facing them especially in today´s globalised and economically complicated world. A step towards maintaining competitiveness is the enlargement of the range of high added value products following the latest technological trends, i.e. processes using digitalisation and automation in production and 3D printing, which in general terms means Industry 4.0.
POTENTIAL OF THE ENGINEERING INDUSTRY The more than 5 000 firms in the Czech Republic engaged in the engineering industry employ over 130 000 people. The Czech Republic also has a high potential among the EU member states as regards the automation of production processes (up to 40 % of all processes can be automated), which explains the high demand for automation equipment and the integration of robots in manufacturing processes. Global players, such as Siemens, ABB, and Robert Bosch, who actively invest in equipment in the Czech Republic and participate in supporting science and research, are aware of the stability of the Czech Republic´s economic environment, the high technological standards of its production, top research and development programmes and the close links between Czech engineering and other sectors of industry. In spite of this, a cooling down in production can be noticed in some engineering branches (not only because of the Coronavirus pandemic), although power engineering is still doing well for the time being. The firms´ great advantage is that
most of them are working on long-term projects and consequently are not excessively dependent on current demand, unlike other sectors of industry. In 2019, production in engineering fell by 1 % in comparison with 2018. The largest markets for Czech products are the neighbouring states and also China. This year, however, experts forecast a slight decline in export activities due to the trade war between the USA and China, and Brexit. Most of the goods were exported to Germany, China, and Slovakia, followed by Poland, Russia, and the USA, according to the Association of Engineering Technology statistics. The coronavirus crisis, however, also hit full force on machinery manufacturers. Already in 2019 Czech firms had to cope with a fall of nearly 25 %, or CZK 13.2 billion, year on year, with machinery exports in the first quarter of 2020 also falling by one-quarter year on year. In the second quarter of 2020 Czech machinery exports dropped by 31 % in comparison with the same period in 2019, according to the Engineering Technology Association (SST). The fall was due to the closing of the borders during the spring wave of the epidemic, when Czech manufacturers could not hand over their machines to the clients, and the handover had to be postponed. The main reason for lower production and fewer orders, however, is the overall decline in investment. One of the reasons of the lower demand for new machines in the automobile industry is also preparation for transition to electromobility. In spite of this Czech companies are moderately optimistic, believing in the arts of Czech people, and innovation.
CONTRIBUTION OF THE AVIATION INDUSTRY The aviation industry has built a respected position for itself in the international arena over the more than a century of its existence. Most of those informed will remember the training and light combat aircraft of Aero Vodochody (L-28, L-39 and L-159), transport aircraft L-410 from Let Kunovice (now Aircraft Industries) and the extensive production of UL/LSA category aircraft. Thousands of these machines found their satisfied customers in all continents except the Antarctic, with their frequently modernised versions continuing their successful tradition, according to CzechInvest Agency. As the list indicates, the domestic industry very often, and justifiably, boasts of being one of few countries in
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