Czech carmaker TPCA plans toboost production capacity by 20,000 to reach 340,000 cars nextyear despite a downturn in auto markets from the globalfinancial crisis, its officials said on Friday.



The move by TPCA, a 50-50 join venture between Japan'sToyota Motor and France's PSA Peugeot Citroen, is a sharp contrast with other European manufacturersthat have 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 has been gradually boostingproduction of its budget Aygo, Peugeot 107 and Citroen C1 modelsto 308,478 last year since starting production in 2005.



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.



On the bleaker side, Volkswagen AG's Skoda Auto,the top Czech firm by turnover, plans to halt its lines for aweek at the end of October due to a drop in demand.



Another Volkswagen factory, which makes top-end SUVs likethe Audi Q7 and Porsche Cayenne in neighbouring Slovakia, isalso considering a production cut.



The Czech economy is highly dependent on the car industry,which employs some 130,000 people. It has been relativelyinsulated from the global credit crunch but both the governmentand the central bank have already cut growth forecasts for 2009.