Skoda Q3 car sales up on German scrap subsidy

Car sales at Volkswagen's Czech unit Skoda Auto grew 6.5 percent in the third quarter, reversing a decline in the previous two quarters, the company said on Thursday.

The "cash for clunkers" subsidy in Germany, Skoda's biggest market, and growing business in China pushed sales to 174,984 vehicles.

The subsidy scheme expired at the beginning of September and Skoda said it expected fourth-quarter sales to roughly match last year's with performance next year "hard to predict."

Over the first nine months of the year Skoda car sales fell by 5 percent to 504,625 cars while global car production shrank by 11.9 percent over the period, Skoda said. Net profit for the period fell 67.5 percent to 2.8 billion crowns ($155.5 million).

Skoda is the Czech Republic's largest company by sales with revenue equivalent to five percent of the country's gross domestic product.

Skoda's performance is an indicator for the overall economy, which hinges on the export of cars, car parts and electronics.

Gross domestic product shrank by 5.5 percent in the second quarter when the economy bottomed out. It was the deepest slump on records.

The finance ministry earlier on Thursday cut its 2009 growth forecast to a 5 percent contraction from a previously seen 4.3 percent fall.