PRAGUE (Reuters). Skoda Auto is a Volkswagen (DE) unit that will be the Czech Republic’s top exporter. The global shortage in chips, which has hampered the auto sector’s growth, will cause production to “significantly decrease or even stop” between Oct. 18 and December 31.

A shortage of semiconductor chip supplies is making it difficult for carmakers worldwide to meet demand.

Skoda Auto spokesperson Tomas Kotera stated that “not even Skoda Auto can avoid this global crisis.”

Economists predict that the Czech government will reduce its production cuts, which are already some of the largest in central Europe.

Skoda is the nation’s backbone, employing 180,000 people and accounting for 25% of all industrial output. It has already stockpiled tens to thousands of finished cars that are awaiting their chips. Some dealers are reporting long waits in order to purchase new cars.

Kotera explained that they wanted to concentrate on getting almost-finished cars back to customers as quickly as possible.

The Czech Automotive Industry Association stated that Skoda’s downtime caused the overall production of cars to look similar to those made in “covid”, 2020.

The association had previously predicted that 1.3 million cars would be manufactured this year.

Skoda employs 35,000 people and says it is committed to maintaining employment. It predicts a slowing down of chip prices in the second half 2022.

Uncertainty in the automotive industry is a significant drag on central Europe. This forces economies to depend more heavily on household spending or a recovery in services to fuel growth.

On Thursday, data showed that the Czech industrial output declined in August year on year for the first-time since February. This was due to a steep drop in vehicle production caused by extended vacations.

Hungary saw its output shrinking more than anticipated due to the auto sector. In August, Germany’s main trade partner slumped.

Three car companies are located in the Czech Republic. Apart from Skoda which was also affected by the September production halt, Toyota faced several outages including that last month.

Vit Hradil, a Raiffeisen analyst, stated that “Automotive isn’t getting out the trenches yet” and added that he will revise his prediction for 3% growth for this year.