Eastern_Europe   Czecho-Slovakia   Czech Republic







By Matthew Weinshel


People around the world associate the Czech Republic with several products, such as crystal and Budwar beer. However, people often neglect some of its major heavy industry. The Czech motorcycle industry represents one of those neglected institutions. Cz and Jawa belong to this industry.
Both firms prospered and excelled prior to the adoption of Communism in the former Czechoslovakia.  Both companies survived the centrally-planned economic system, but have been severely, if not permanently, scarred and disadvantaged by that system. Cz, which is located in southern Bohemia, remains more secure than its brother, Jawa. It converted to a weapons manufacturer during World War II, but it continued to secretly develop its famous motorcycles during the war. 


After World War II, the centrally-commanded economy limited its production to specialized moto-cross, racing machines, and various auto parts. This lasted until 1990 and the Czechoslovak Revolution. In January, 1992, Cagiva, an Italian producer, purchased 51% of the firm's share under the condition that the Italians would continue to produce motorbikes and introduce new models. The new shareholders changed the company's name to Cz-Cagiva after paying about $17.5 million. It has plans to take over the production of all machines in the 50 - 250cc range.
As of 1993, most of the company's production originates through Italian imports, but approximately the plant in the Czech Republic continues to produce about three-thousand Roadster 125's. The company's capacity maximizes at approximately 18,000 machines. Cz-Cagiva continues to improve through foreign trade. It has developed an arrangement to ship approximately two-thousand machines per year to China. In addition, "an assembly plant for the Jawa 350 and CZ 175 models went into operation in Egypt. Its initial capacity was 25,000 units of each model." 1


Jawa claimed the real large-scale production during the Communist period. The company's plant lies approximately twenty-five miles south of Prague. Until 1990, the central planners directed Jawa to produce approximately one-hundred-thousand simple, reliable motorbikes for the Soviet-bloc states.
The former Czechoslovakia exported the vast majority of the machines to the former Soviet Union. In 1992, Jawa produced only ten-thousand models, all of which traveled west due to the East's unpaid bills and Jawa's bank debt.


Jawa has discovered new markets in South America and Turkey. It investigates possibilities in trade with China, Iran, and Nigeria. Its ultimate goal remains to have the ability to compete with western producers. However, that possibility appears unlikely due to the tremendous lack of investment into the firm for so many years.
   In 1993-94, the firm privatized by legal tender. The motorcycle market in the  Czech Republic continues to make strides toward recovery from forty years of central planning. However, it received little investment over those years and it has incurred some fairly large debts. The industry continues to produce simple, cheap, and reliable machines, but the probability that it will achieve the ability to compete with the West seems pretty slim.



1"Mr Jiri Jirak--Opportunity for gearing up Czech-Egypt trade," Moneyclips, April 28, 1993.




"Czech Motorcycles: Two Ways to Rev." The Economist,October 23, 1993, p. 82.

"Mr. Jiri Jirak--Opportunity for gearing up Czech-Egypt trade." Moneyclips, April 28, 1993.

Narbrough, Colin. "EBRD Highlights the `real' Issues." The Times, April 24, 1993.





OK Economics was designed and it is maintained by Oldrich Kyn.
To send me a message, please use one of the following addresses:

okyn@bu.edu --- okyn@verizon.net

This website contains the following sections:

General  Economics:


Economic Systems:  


Money and Banking:


Past students:


Czech Republic


Kyn’s Publications


 American education


free hit counters
Nutrisystem Diet Coupons