While in 2008 the country produced 575,800 cars and utility vehicles, in 2014 the number rose to 993,000, which represents a 72 percent growth. No other country in the region has reported such an increase, the analysis by Coface suggests.
Altogether 3.6 million cars were made in the CEE region last year, which accounts for one-fifth of production in the European Union and 4 percent of production worldwide. The automotive sector is a driving force of the CEE economies. The countries were able to lure a significant portion of foreign direct investments, which resulted in a twofold increase in car production in the region over the past 10 years, said Coface economist Grzegorz Sielewicz, as reported by the TASR newswire.
The most successful countries in the region are Slovakia, the Czech Republic, and Romania, where production rose three or even four times. Moreover, Slovakia and the Czech Republic belong to the 20 biggest car producers in the world. Both countries produce up to two-thirds of the total production of cars in the CEE region, Sielewicz said.
The analysis also suggests that the Czech Republic, Hungary, Romania, and Slovakia invested the most into production expansion, TASR wrote.
There are altogether 33 car-producing plants in the six countries of the CEE region. They lured foreign direct investments mostly thanks to the appealing costs of labour, geographical location, educated labour force, and improving business environment, Sielewicz explained. The western European brands are dominant in the region, especially those from Germany, France, and Italy. There are also Asian carmakers, as reported by TASR.
The automotive sector employs a total of 850,000 people, and significantly contributes to economic growth. One of the best examples is Slovakia where the automotive sector accounts for 32 percent of the total value of overall production, the analysis suggests.
Second comes the Czech Republic with 22 percent. They also report the highest share of total production, with 12.6 percent regarding Slovakia and 9.1 percent in the case of the Czech Republic.
Sielewicz, however, warned that the producers are dependent on exports as up to 85 percent of car exports go to EU countries. About 26 percent of cars produced in Slovakia are exported also to other countries, with 4 percent going to the US and 7 percent to China, TASR reported.
Though Russia is an important export market for the CEE region and Slovakia, the current geopolitical situation, the recession in the country, a weaker currency, and high inflation resulted in a drop in demand. Back in 2013 exports from Slovakia to Russia accounted for 7 percent, but it dropped by 21 percent in 2014, the analysis shows.
22. Jul 2015 at 13:56 | Compiled by Spectator staff