The Czech Republic is growing, especially with the production of cars and machines. A burden is the high dependence on the neighbor Germany – where the economy is paralyzed.
In the Czech Republic it is easy – or rather, the cars just roll off the assembly line. 1.4 million cars last year, which was a record. In 2024 the Czech Republic was the only country in Europe that grew in auto production. Everywhere else there was doldrums.
“The Czech Republic is a very traditional industrial country,” says Christian Rühmkorf from the German-Czech Chamber of Commerce and Industry. “That actually goes back to the Habsburg time. But the automotive industry is extremely important. The Czech Republic has really excellently trained engineers.”
Long tradition in the car
The country with its own Czech car brand Skoda can look at almost 120 years of Autobau tradition. So it is almost as long as Germany. There are also large works by Hyundai from South Korea or Toyota from Japan. “We also have all the important major automotive suppliers here, sometimes also with several works,” says Gerit Schulze, director of the Czech Republic at Germany Trade and Invest, the federal business development agency.
Otherwise, Czech Republic is better than many other EU countries. The growth is two percent – which is twice as much as the EU cut. There is full employment in the country. And even the state finances are in solder. Against the perception of many, the Czech Republic has blossomed into a top industrial location.
Too depending on Germany?
But: Not everything runs smoothly. Christian Rühmkorf sees problems with the investments. “The investments have been falling for years. 43 percent of industrial companies want to invest less in 2025. And of course this endangers competitiveness in the long term.”
The country also depends enormously on the German economy – around a third of all exports go to the western neighboring country. Expert Schulze from Germany Trade and Invest sums it up: “The Czech economy always says: If Germany has a runny nose, the Czech economy gets flu.”
Wages under the EU cut
That means: the lame economy in Germany also brakes the Czech Republic. That is why the Eastern European country has been trying to open up new markets for a long time, especially in Asia – Skoda, for example in Vietnam and India.
People in the Czech Republic still earn little in the EU comparison, and on average 1500 euros gross per month. But that will change, believes Gerit Schulze. But this also needs more high -tech: “This is not possible with simple warehouses or assembly lines, as they have been built here in the Czech Republic in the past, but for this, the Czech Republic needs more high technology, more added value and actually has very good conditions.”
“Wide consensus for open markets”
Something could also change politically soon: a change of government is indicated in the parliamentary election that begins today. The right -wing populist party of the former prime minister and entrepreneur Andrej Babis is in the top of the surveys.
However, the experts do not expect great economic upheavals. Christian Rumkorf says: “Basically, there is really a broad consensus for open markets in the Czech Republic, for EU integration and investment friendliness, and there should actually be little.”
The Czech Republic remains an industrial wonderland in the heart of Europe – with opportunities, but also construction sites for the future.
