The automotive industry companies represent the backbone of the Czech economy. In 2016, total Czech automotive production accounted for about $44 billion of which 80 percent was exported. Production of exported automotive parts and equipment was 58.8 percent of the total and the remaining 41.2 percent was the production of new vehicles for export. The sector is characterized by a high proportion of imported materials, components and parts for production and assembly with a high proportion of exports of final products.
Czech republic
Summary
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Excellent opportunities exist for U.S. automotive suppliers interested in selling parts to local auto plants or to the aftermarket. However, European markets are very competitive and tapping into local supply chains can be both a costly and time consuming process.
Finding a good local partner is the key to successful entry into the Czech market. The quickest way into the market is to find a distributor with an existing distribution network which may welcome a new U.S. product that supplements an existing line. The best distributors work closely with their foreign suppliers to develop strategies tailored to the nuances of the local market, drawing on the distributor’s knowledge of local pricing strategies, promotion techniques, and competition. In most cases, one distributor can provide coverage throughout the entire country for a related line of products.
Growing interest in alternative fuel vehicles (CNG, electric propulsion, hybrids) is the primary factor boosting the demand for alternative fuel propulsion and related equipment. Purchases of alternative fuel vehicles for municipalities and local governments are subsided by the Czech government (about $1,000 per unit) and alternative fuel vehicles used for business purposes are exempt from road tax.
Market Entry & Trends
American exporters should be aware that all imported products are subject to certification for quality and safety in conformity with relevant EU regulations. The certification process may require that a sample from the planned import batch of the product be tested and approved by a notified body anywhere in the EU. There are no other trade restrictions on imports of cars and automotive components from the United States, other than import duties --- 10% for cars and 3-6.3% for automotive parts (see TARIC, the integrated Tariff of the European Union for details).
Barriers
Zdenek Svoboda
U.S. Embassy Prague, Czech Republic