By Martin Dokoupil
PRUHONICE, Czech Republic, Dec 10 (Reuters) - The Czech Republic's top industry, car production, will shed over 13,500 jobs in the next few months as suppliers are being hammered by recession in the euro zone, but vehicle output will still grow next year.
The Car Industry Association boosted on Wednesday its estimate for overall layoffs to 13,552 people from 3,000 in October due to slumping car demand in Europe.
The number of workers in the sector will drop to some 124,648 by June 2009, with parts makers hit the worst, a survey among 80 percent of the association's 160 members showed.
"Nearly 70 percent of car industry firms are considering layoffs and the biggest falls are at suppliers, where more than 10,000 workers will lose jobs," the association secretary Antonin Sipek said after a meeting of industry leaders.
The Czech economy is highly dependent on the car industry, which accounts for 21 percent of overall exports.
There have been no collapses in the Czech banking sector as a result of the global turmoil but all other companies are being hit hard, and both the central bank and the government have repeatedly cut growth forecasts for 2009 to below 3 percent.
Economic growth slowed to 4.2 percent in the third quarter, which is the lowest pace in four years, more than the 4.7 percent expected by the central bank, data showed earlier on Wednesday.
Auto makers -- led by Volkswagen AG Skoda Auto and TPCA, a joint Toyota-Peugeot operation -- stuck to their reduced October forecast for 4 percent growth in overall vehicle output this year to 969,017 cars.
Output should grow further as Hyundai Motor ramps up production to its eventual 300,000 target at its factory opened earlier this year.
"Output will be somewhere around 1 million vehicles and we will cross 1 million next year due to the launch of Hyundai's plant," said Martin Jahn, head of Volkswagen's Russian unit and the association.
"But we cannot expect such a massive production rise we were used to due to the recession (in Europe)," he said.
Carmakers across the continent have announced major cuts to production due to falling demand and many factories will close for long periods over the Christmas holidays.
French car sales dropped 14 percent last month, while Germany, Czech Republic's key trading partner, posted an 18 percent decline, leaving the industry on track for its worst year there since reunification in 1990.
Skoda Auto, the top Czech firm by turnover, has announced an extension of a shutdown set for the last two weeks in December until Jan. 11 next year. Its planned cuts for the final three months of 2008 would trim output by 31,000 cars.
A Skoda executive said last month the company expected a 9.5 percent rise in sales this year to 690,000 units, and will target unchanged sales in 2009.
On a brighter note, TPCA announced in October plans to boost capacity by 20,000 to reach 340,000 cars next year despite a downturn in auto markets, due to rising demand for its smaller, cheaper and more efficient cars. (Editing by Mike Nesbit)