CeeIndustrial reports on the automotive industry in Central and Eastern Europe and developing you business in the CEE region

A key growth industry for Central and Eastern Europe is the automotive industry and this trend will continue to grow as CEE is an important market for the import of Cars and Auto parts as well as a production base for all areas across the Auto industry. The Auto industry has had its problems over the last couple of years but Central and Eastern Europe has generally continued to develop.

The bulk of the investment in the auto industry has come from German auto manufacturers and parts suppliers, way back in 1991 VW took over the Czech giant Skoda so the relationship between German companies and CEE has a strong history. Many large and SME German parts suppliers supply the Auto industry in Central and Eastern Europe as well as using the CEE counties as a production base to supply both the local CEE region and there own domestic Car production in the German market . German Auto and parts manufactures tend to concentrate there investments in the Czech Republic, Slovakia and Hungary.  German companies interlink there production with there production in Germany therefore making use of the cheaper overheads in Central and Eastern Europe whist maintaining there quality. Due to the investment of German auto part manufacturers in there production of auto parts Germany is in fact a larger importer from CEE then exporter of Auto parts.

Fiat the Italian Car maker made its first investment in Poland in 1992 after buying out the government venture FSM with a $ 2 billion dollar investment. Investment over the years has been steady for Fiat in its Polish subsidiary and in recent announcements they will be moving production of the Panda model from Italy to Poland with a $ 700 million dollar investment and they will also build Lancias from 2011 in Poland as well, they expect to build 120,000 models annually of the Lancia Ypsilon model.

Central and Eastern Counties are dominated by one or two major auto manufactures, Poland is dominated by Fiat and Opel, Czech Republic local produces Skoda , Slovakia Skoda and VW, Slovenia Renault are the two major players and in Hungary are Suzuki and Audi . Korean auto manufacturer Hyundai’s has recently buil its CEE production base in  Nosovice in the Czech Republic The Russian market seems to be a lot more diverse as all the major Auto manufactures have market share there. In fact the auto industry accounts for 14% of all manufacturing in the Czech Republic, Slovakia and Slovenia and Poland its represents just over 9% of total industrial output.  Recently Toyota and Peugeot Citroen announced there plans to invest € 1.5 billion euro to build a joint factory in the Czech Republic and there prediction is to build over 300 000 cars.

Demand for Cars in Central and Eastern Europe has out paced Western Europe in recent years and this will continue for the foreseeable future, the highest density for cars in CEE is in Slovakia. The Polish second hand car market has been the largest per head with in the EU since Poland’s accession with in the European Union. Poland is the largest market with in the CEE region for the higher end German cars.

With difficult economic conditions in the Western European auto market and the lower levels per head of car ownership in Central Eastern Europe then the demand for cars in CEE will only increase, Poland with its larger population is the most attractive market and if Polish car ownership levels reached the EU average then that would indicate a market for a further 3.4 million cars currently Poland produces about 1 million cars per year. Further growth for the automobile industry will come from other CEE counties such as Russia, Ukraine, Bulgaria, Romania, Baltic and Balkan counties and candidates from EU accession such as Croatia. The major car manufactures already have plans in place to succeed in developing there business across the whole of Central and Eastern Europe.

CeeIndustrial feels that on a whole the ground breaking investments have all been made by the major Auto manufactures from Europe the next wave of manufacturers will tend to come from the Far-East particular Chinese companies whole look to find a competitive production with in the EU to allow them easier market access across the whole European union. With the the development of the Auto Industry this particularly creates demand for other industry's such as, Machine tools , Sheet metalworking, Automation and robotics, metalworking, Chemicals, Plastics, Wood working in all the auto industry touches many Industry's and so is a great driver of growth though out CeeIndustrial and therefore Central and Eastern Europe.