The Czech Republic's topindustry, car production, will shed jobs and suppliers are beinghit by the global economic crisis, but it will still grow thisyear and some companies plan to increase production further.



Czech carmaker TPCA said on Friday it plans to boostcapacity by 20,000 to reach 340,000 cars next year despite adownturn in auto markets, due to rising demand for its smaller,more economic cars.



At the same time, the Car Industry Association halved itsestimate for overall 2008 car output growth and said up to 3,000people would lose jobs, with suppliers the worst hit.



The move by TPCA, a 50-50 join venture between Japan'sToyota Motor (7203.T: Quote, , Research, ) and France's PSA Peugeot Citroen(PEUP.PA: Quote, , Research, ), is in sharp contrast with European manufacturers thathave announced output and job cuts due to falling demand.



'The whole car industry is experiencing a slowdown. We areraising capacity ... because the mini car segment is growing inEurope,' said Jiri Cerny, TPCA Vice-President for production.



The third biggest Czech exporter, TPCA has been graduallyincreasing production of its budget Aygo, Peugeot 107 andCitroen C1 models since starting production in 2005 and made 308,478 units last year.



The company, with sales of over 50 billion crowns ($2.78billion) last year, now expects to reach capacity of 320,000vehicles this year and produce more than that in 2009 withupgraded lines seen starting at full speed in June.