Automotive and vehicles
Driven by lower labour costs, increasing economic wealth and growing consumer income, the automotive industry has been shifting to the CEE. FDI and production increased dramatically across the Czech Republic, Poland, Slovakia and Hungary, due to a highly skilled workforce and spare industrial capacity.
The Czech Republic is the largest manufacturer and one of the world’s most attractive automotive R&D locations, with its existing companies aiming to achieve production of at least 1.5 million units per year by 2018. Škoda Auto has established three plants in the region and is currently expanding the Hradec Králové industrial zone. Poland is second largest in manufacturing vehicles and component parts, while Romania has constructed more significant production facilities.
Bulgaria is aiming to attract FDI and stimulate domestic entrepreneurship by adopting a flat 10 per cent corporate income tax rate, one of the lowest in Europe, while Croatia is offering government incentives and access to EU funds to boost its total national value of exports from its existing 1.8 per cent. The value of Serbia’s component and car manufacture totals €1.5 billion and accounts for 10 per cent of FDI stocks. A similar figure applies to the Slovenian GDP, its sector focussed on R&D and education in electrical and mechanical engineering. Due to its favourable geographical location, and existing FDI, Slovakia’s output has doubled in the last six years, with plans to spend more by 2016. Along with the Czech Republic and Slovenia, its output already far exceeds that of Germany, Sweden and Spain.