Impacts of economic crisis on the automotive industry in the CR - is scrappage programme right solution?

The major topic of this Bachelor's thesis is the effect of the depression on the car industry, particularly the way in which the state can deal with it in both, short-term and long-term standpoint, which tools can it employ, and whether these are effective or not. First, the topical situation in the Czech car industry is to be focused on, including its development, historical correlations and political measures in this field (for instance the support of direct foreign investment, establishing new production plants and tax relieves). It is due to these tools that the car industry has acquainted its prominent position in the Czech industry. Another question to be given attention to is whether now, with the benefit of hindsight, the earlier short-term precautions have proved to be appropriate or not and whether the state contributed by its prior acts to the strength with which this field of industry has been affected. The theoretical part of this Thesis concerns the main theoretic findings of selected economists about the influence of state intervention on GDP in the short-term and long-term perspective and also from the perspective of different effect on particular economic sector. The subsequent part of the Thesis provides an analysis of the conditions of the scrappage programme as a highly specific state instrument for solving the topical crisis. Furthermore, there is a brief comparison of the Slovak and German scrappage programme with its Czech variant. As it is recently comming out, the car sales in the Czech Republic are increasing even with no aid from the state. Conversely, the countries, which have recorded a short-term growth after having adopted the scrappage system, later showed a significant fall in car sales, that went even under the numbers preceeding the period of the system introduction. The theoretical part deals with other possibilities of state support, too. Having the ground in the analytic part of the Thesis, a description follows of benefits and disadvantages of introducing the scrappage system in the Czech Republic as a means of state intervention from the point of view of various economic schools. There is also an evaluation of eventual implications of introducing or refusing the scrappage system in the biggest car-producing company in the Czech Republic -- Škoda auto, a.s. This evaluation is based on an analysis of economic results of the company. These results for the recent years are to be compared as well with focus on the effect of the economic crisis of the home market and export areas, which form the major sales of the company.