THE PERFORMANCE OF THE AUTOMOTIVE INDUSTRY AFTER THE CRISIS IN TWO SEMI- PERIPHERAL EU REGIONS

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Madison Adams
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1 THE PERFORMANCE OF THE AUTOMOTIVE INDUSTRY AFTER THE CRISIS IN TWO SEMI- PERIPHERAL EU REGIONS GÁBOR TÚRY Institute f Wrld Ecnmics, CERS HAS, Hungary 15th Eurpean Assciatin fr Cmparative Ecnmic Studies Cnference Warsaw, September 6-8th, 2018

2 ABOUT THE TOPIC Based n ecnmic develpment, we can define center and periphery (western, suthern, eastern) areas in Eurpe. There is n exact divisin, it depends n the methdlgy t select the cuntries. Our target cuntries are the Central Eurpean (Czech Republic, Hungary, Pland and Slvakia) and the Iberian cuntries (Spain and Prtugal); Why these cuntries? N indigenus OEMs in the car manufacturing; Dependency i.e. current autmtive industry is based n freign investments in the 80 s and frm the 90 s + except Spain almst the 100% f the prductin sld abrad (high exprt rati) Play key rle in glbalizatin and the redistributin f resurces in Eurpean and glbal autmtive industry

3 AUTO ASSEMBLY AND PARTS SUPPLIER PLANTS IN EUROPE (2013) Surce: Klier and Rubenstein (2015)

4 LABOR COSTS IN THE AUTOMOTIVE INDUSTRY (AVERAGE PERSONNEL COSTS, EUR/PERSON/MONTH) Czech Republic Hungary Pland Slvakia Spain Prtugal Germany France Italy EU28 (frm 2011) Surce: Eurstat (2018): Annual detailed enterprise statistics fr industry

5 ROAD VEHICLE PRODUCTION (THOUSAND) Czech R. Hungary Pland Slvakia Prtugal Spain EU27 (right axis) Surce: OICA (2018): prductin statistics

6 AUTOMOTIVE EXPORT AS PERCENT OF THE TOTAL EXPORT SPAIN PORTUGAL CZECH REP HUNGARY POLAND SLOVAKIA EU28 Surce: authrs calculatins based n Eurstat CmExt database (2018)

7 DIFFERENCES IN GLOBAL EMBEDDEDNESS SHARE OF EXTRA-EU EXPORT (PERCENT OF TOTAL, 2017) CZECH REP HUNGARY POLAND SLOVAKIA SPAIN PORTUGAL EU28 Autmtive Ttal Surce: authrs calculatins based n Eurstat CmExt database (2018)

8 CRISIS EFFECTS - EMPIRICAL APPROACH Spain and Prtugal had the wrst figures cmpare t the EU average; Ging int details: prductin figures shw the different perfrmance f the cmpanies; as well as the different prduct prtfli in the whle autmtive industry in the car prductin and the rad vehicle prductin; new investments: prductin launched just after the crisis started

9 DIRECT AUTOMOTIVE MANUFACTURING EMPLOYMENT (NACE C29, 2005=100) Czech Republic Hungary Pland Slvakia Spain Prtugal EU28 (frm 2011) Surce: Eurstat (2018): Annual detailed enterprise statistics fr industry

10 COMPOSITION OF THE AUTOMOTIVE EXPORT BY MAIN PRODUCTS (2005 AND 2017) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% ES ES SK SK EU28 EU CZ CZ PT PT PL PL HU HU Vehicle exprts are numbers underlined. Surce: authrs calculatins based n Eurstat CmExt database (2018)

11 CHANGING GLOBAL PATTERN OF PRODUCTION FOR COMPANIES IN THE EXAMINED COUNTRIES (PERCENT) EU/Wrld EU6/Wrld EU6/EU Daimler* FIAT* Frd** General Mtrs KIA-Hyundai Nissan PSA Renault Suzuki Tyta Vlkswagen * withut Chrysler; **Saab ceased its prductin in 2012, Vlv was sld t Chinese Geely in Surce: authrs calculatins based n OICA (2018)

12 FURTHER ASSEMBLY PLANTS Indian wned Jaguar Land Rver t mve UK prductin f mdel Discvery t Nitra, Slvakia. The plant will have an annual capacity f 150 thusand vehicles, but with the capacity t expand t anther 150 thusand if needed. The first cars are expected t cme ff the prductin line in late German car manufacturer Damiler began cnstructin f its secnd car plant in Kecskemét t increase its prductin. German car manufacturer BMW annunced in summer 2018 cnstructin f new plant in Debrecen, Hungary. The factry will have a prductin capacity f 150 thusand cars.

13 SOME EXAMPLE OF THE TECHNOLOGICAL CHANGE Audi Hungaria is preparing t launch the serial prductin f electric cars in late-2018, early-2019, which will cincide with the start f prductin f electric mtrs at the Hungarian plant; PSA s Szentgtthárd plant (frmer GM) t cntinue nrmal peratin despite wnership change, but there are n future plans fr the technlgical change; Suzuki n engine prductin (yet) in Hungary, annunced a jint prductin with Tyta t the Indian market; The secnd Kecskemét Daimler plant in will be a flex-plant, meaning it will be able t prduce cars with different architectures as well as EV; Škda Visin E is the basis f an electric car will be launched by Nt nly the prductin f electric mtrs and electrical cmpnents but als fr a purely electric-drive vehicle at the Mladá Bleslav and Kvasiny plants t cver the needs f Škda and the Grup as a whle; LG Chem battery plant in Pland prduces batteries fr cars, the biggest cnsumers are the Renault and Nissan; VW s plant in Bratislava has been prducing the e-up! in Slvakia since 2013; the Jaguar Land Rver Autmbile Plc plant in Nitra (central Slvakia), has applied fr permissin t add a new wing, chiefly fr battery prductin.

14 MAIN FINDINGS main part f the trade is part f glbal value chains, n maneuvering rm fr the suppliers; prductin and exprt figures f the selected cuntries reflect the perfrmance f the cmpany n the target markets; in the case f OEMs and suppliers, the prduct prtfli is relevant fr prductin, exprt and emplyment data; number f investrs and the cncentratin bserved in the sectr is als decisive in the develpment f the prductin vlume and the future prspects f the industry; specializatin f the industry/prductin has impact n trade relatins and prspects; nly a few investments in prducing new technlgies t replace the cnventinal internal cmbustin engines.

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