Automotive industry

The automotive industry has long been one of the key pillars of the Czech national economy and its main engine of growth. Vehicle manufacturers and their suppliers account for approximately 9% of GDP and nearly one quarter of the country's total exports. The domestic automotive sector is also a leader in research, development and innovation – it represents almost one third of industrial R&D investment and generates a significant multiplier effect across related industries.

The automotive industry directly employs 180,000 people and up to 500,000 including related sectors. It contributes CZK 80 billion annually to public budgets. The Czech Republic is also a major player globally – within the EU it is the third-largest producer of passenger cars and per capita, ranks second in the world. In the bus segment, it holds the world's top position per capita.

Its strategic location in the heart of Europe, developed industrial infrastructure and competitive cost conditions keep the Czech Republic among the most attractive destinations for new automotive investment.

Resilience, electrification and stable performance

The year 2025 confirmed the exceptional resilience and performance of the Czech automotive industry. Domestic plants produced more than 1.44 million passenger vehicles, making it the second-strongest result in history. Bus production reached a record level and the electrification of output accelerated significantly.

The Czech Republic thus reaffirmed its position as one of Europe's key manufacturing hubs – even in an environment of rising costs, fluctuating demand and geopolitical uncertainty. The automotive industry remains a crucial pillar of the Czech economy, with more than 92% of passenger cars exported.

A major feature of 2025 was the acceleration of electric vehicle production. Output increased by almost 90% year-on-year, and electrified models – both battery-electric and plug-in hybrid – accounted for nearly one fifth of total passenger car production. Electrification is therefore clearly moving from a supplementary segment into the mainstream.
These results are built on a highly skilled workforce, strong technical know-how and the ability of companies to respond flexibly to market developments. Manufacturers also continued investing in modernization and innovation, further strengthening competitiveness and the Czech Republic's position as a reliable manufacturing base.

2025: Second-strongest year for passenger cars, record bus production

Despite ongoing economic and geopolitical challenges, the Czech automotive industry maintained a high production pace. A total of 1,445,776 passenger cars rolled off production lines.

Škoda Auto remained the largest producer with a 65.5% share of total output, manufacturing 947,140 vehicles domestically, up 5.6% year-on-year.
Hyundai Motor Manufacturing Czech followed with 276,175 vehicles (19% share) and Toyota Motor Manufacturing Czech Republic produced 222,461 vehicles (15.5% share). Exports remained the key outlet, with more than 92% of vehicles shipped abroad.

Electrification was one of the most dynamic segments. A total of 285,176 electrified passenger cars were produced, including 224,383 battery-electric and 60,793 plug-in hybrid vehicles. Electrified models thus accounted for 19.7% of total production. Škoda Auto recorded the highest share of electric vehicles in its output (23.2%), with Hyundai's Nošovice plant achieving a similar level (23.8%).

Bus production reached a record 5,651 units, up 26% year-on-year. The largest producer, Iveco Czech Republic, exceeded the milestone of 5,000 buses for the first time (5,143 units), with an additional 160 vehicles completed in Foggia, Italy. SOR Libchavy also increased output to 480 buses. Production of fully battery-electric buses rose by 50% to 385 units.

In the truck segment, Tatra Trucks produced 1,349 vehicles, of which 823 were exported and 514 registered domestically.
Production of trailers and semi-trailers reached 17,368 units, including 15,298 light trailers up to 3.5 tonnes and 2,070 heavy trailers and semi-trailers. The traditional motorcycle manufacturer Jawa Moto produced 692 motorcycles.

Challenges for 2026

The performance of Czech vehicle manufacturers and suppliers remains closely tied to developments in the European market and the shape of EU legislation. A key issue for the coming period is the revision of decarbonization rules. The fundamental challenge is no longer only the 2035 target but above all the trajectory to 2030, where a growing mismatch is emerging between regulatory requirements for the share of electric vehicles and the market's real absorption capacity. Without greater flexibility and a technology-neutral approach, there is a risk of reduced model offerings, upward pressure on vehicle prices and further weakening of European competitiveness.

The supplier sector remains highly sensitive to developments in Germany, which is the key export market for Czech companies. The expected slowdown in production and continued volatility in orders increase planning uncertainty and complicate investment decisions. Further disruptions to supply chains cannot be ruled out due to geopolitical tensions or limited availability of strategic raw materials and components.

Long-term structural issues include energy prices and the shortage of skilled labour. Maintaining competitiveness therefore requires a stable and predictable business environment, systemic solutions to energy costs and strong support for technical education and the training of a new generation of specialists.

Despite these challenges, the Czech automotive industry stands on solid foundations and remains a strong sector. The Czech Automotive Industry Association (AutoSAP), which brings together most major domestic vehicle manufacturers, suppliers and other institutions involved in the development of the sector, supports an open discussion about its future direction. Key topics include zero-emission mobility, digitalization and automation of production, connectivity, the use of artificial intelligence and the development of autonomous vehicle technologies.

AutoSAP's goal is to continue creating conditions that will keep the automotive industry a strong, competitive and innovation-driven pillar of the Czech economy while ensuring affordable and sustainable mobility for the country's population in the long term.