* TPCA delays plan to boost capacity to 340,000 cars
* Expects output to grow by 1.8 pct to 330,000 this year
* Sees no European market rebound this year
* Plans no extraordinary shutdowns in coming months
By Martin Dokoupil
PRAGUE, March 25 (Reuters) - Czech carmaker TPCA has
postponed a plan to boost production capacity to 340,000 cars
this year, due to the global downturn, but its output should
still grow slightly on higher demand for smaller cars, its head
said on Wednesday.
TPCA, a 50-50 joint venture between Japan's Toyota Motor
<7203.T> and France's PSA Peugeot Citroen <PEUP.PA>, has
weathered the impacts of the economic crisis better than other
European producers as people shifted to less expensive models.
But its president, Yasuhiro Takahashi, said the carmaker
wanted to stay cautious as it was not clear how long an
incentive scheme to replace older cars in Germany keeps boosting
demand for small cars.
"The main reason (to delay the expansion) was that sales
fell a bit in the autumn," Takahashi told Reuters after
presenting last year's results.
"Now we are analysing what to do ... Small cars are selling
well in Germany but this could end very soon as the scrappage
amount is limited. We are ready to go forward when conditions
are right," he said.
The third biggest Czech exporter, which revealed its
expansion plan in October, increased production of its budget
Aygo, Peugeot 107 and Citroen C1 models by 5 percent to 324,289
last year.
TPCA, which started production in 2005, plans to assemble
330,000 cars this year, reaching its maximum capacity, Takahashi
said.
The carmaker plans no extraordinary shutdowns of assembly
lines at its Kolin plant, 67 km (42 miles) east of Prague, in
the coming months.
TPCA's outlook contrasts with that of Volkswagen's <VOWG.DE>
Skoda Auto, the top Czech firm by turnover, which expects unit
sales to show a single-digit drop this year due to the deepening
recession in western Europe [].
The Czech economy is highly dependent on the car industry,
which accounts for 21 percent of overall exports and is expected
to axe 13,500 jobs to some 124,648 by June.
The country's exports plunged by 24 percent in January,
their fastest annual pace on record, and companies slashed jobs,
pushing unemployment to a two-year high of 7.4 percent in the
same month [].
"We can very realistically expect that the (car) market (in
Europe) will not rebound this year and the very difficult period
will continue," Takahashi said.
The rapid deterioration in the country's export performance
led the government to expect the economy to shrink by up to 2
percent this year in a first contraction since 1998.
TPCA said it scrapped the plan to hire additional workers at
the turn of the year due to the market weakness and plans to
keep employment at around the current 3,582 this year.
The carmaker's revenue fell by 4 percent to 49 billion
crowns ($2.42 billion) last year, mainly dented by a strong
crown <EURCZK=>.
(Editing by Greg Mahlich)
