* Skoda says order books full for two months
* Sees H2 unit sales flat, recovery in 2010
* End of German scrap scheme to hit small car output
By Jason Hovet
MLADA BOLESLAV, Czech Republic, Sept 11 (Reuters) -
Volkswagen's <VOWG.DE> Czech unit Skoda Auto expects to narrow
its full-year sales fall to 5 percent, from double-digits in the
first half, and sees a rebound in 2010, its chairman said.
Hit by dwindling demand because of the economic crisis over
the past year, the largest Czech company and exporter got a lift
from government car-scrapping subsidies in western Europe in the
second quarter that suited its smaller models.
In an interview at Skoda's plant 45 km north of Prague,
Chairman Reinhard Jung told Reuters that while the effect of the
scrappage scheme would wane after it ended in Germany last week,
signs from important markets in western Europe and China were
looking better.
"We are running on track," Jung said. "We have a good order
bank from the market, so for the next two months our books are
filled," he said.
"And we just introduced our new Yeti (sport utility
vehicle), and will introduce a station wagon for our Superb;
that is a new car we didn't have last year in sales."
Skoda, which delivered 674,000 cars last year, is a key part
of the Czech manufacturing chain, giving jobs to 27,000 at its
plants and tens of thousands at supplier firms.
Its sales equal 5 percent of the country's gross domestic
product which dropped by 5.5 percent year-on-year in the second
quarter, when the economy bottomed out.
Skoda's fortunes are therefore indicative for the wider
economy, which has suffered an 18.5 percent drop in industrial
output so far this year due to poor foreign demand
[]. Skoda's unit output plunged by 30 percent in
the first half.
Car sales across Europe are expected to slump more than 12
percent this year.
Skoda saw deliveries to customers fall 10 percent in the
first six months of 2009 when sales revenue dropped almost 20
percent to 89.7 billion crowns ($5.14 billion).
Hit by discounts, a fluctuating currency and lower plant
utilisation after cutting output, first-half net profit plunged
more than 60 percent to 2.7 billion crowns.
Jung said second-half turnover would be comparable to the
year before. He said the drop in profit in the second half would
be less than in the first half due to better utilisation, but
declined a forecast.
SMALL MODEL HURT
Around half of Skoda's sales go to western Europe, and Jung
said the loss of German scrapping subsidies would hurt Skoda's
small model car, Fabia. Its production would likely be cut later
this year to around 1,000 cars a day, from 1,200, to which it
was raised earlier this year to meet growing demand.
The Czech lower house of parliament this week overrode a
presidential veto of a scrappage subsidy, although its launch is
still far from certain ahead of early elections this autumn.
And with only around 9 percent of Skoda's production going
to the home market, Jung said the impact was likely to be small.
Jung said that next year's sales would get a boost from
markets in western Europe, growth in China -- where Skoda
expects to sell more than 100,000 cars this year, up from 59,284
-- and the introduction of the Yeti and Superb station wagon.
"We expect better sales ... but nobody can really forecast
what will be the exact number," he said. "Eastern Europe is
still down and there is no light at the end of the tunnel."
(Editing by Rupert Winchester)
($1=17.46 Czech Crown)
