German car maker Volkswagen will halt production at its Slovak assembly plant for a regular three-week company-wide summer vacation as of July 22, Webnoviny.sk reported.

The company will use the summer break for maintenance and repair of production equipment. Production should restart on August 12.

Construction works of new facilities at the site, however, will continue during the vacation.

IntelliNews Comment: The three-week halt of Volkswagen’s production will have a negative effect on Slovakia’s industrial output in July and August and may also affect the country’s economic growth.

Volkswagen, together with South Korea’s Kia Motors and France's PSA Peugeot Citroen, which also assemble cars in Slovakia, is one of the main drivers of the country’s economy, which is powered by exports of cars and electronics.

Car production, which jumped 40% to a record high of over 900,000 cars last year, was the main driver of Slovakia’s economic growth in 2012 but is expected to stagnate this year, as demand for new cars in Europe and China is falling, the three plants are operating at full capacity and there are no new capacities being installed.

Volkswagen Slovakia, which has produced over 3 million vehicles for the past 20 years, assembled a record-high of 419,888 vehicles in 2012, doubling the output from 2011, and has said it would try to keep production at high levels and even increase it this year.