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
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
AUTO ASSEMBLY AND PARTS SUPPLIER PLANTS IN EUROPE (2013) Surce: Klier and Rubenstein (2015)
LABOR COSTS IN THE AUTOMOTIVE INDUSTRY (AVERAGE PERSONNEL COSTS, EUR/PERSON/MONTH) 2008 2016 Czech Republic 1 350 1 675 Hungary 1 300 1 558 Pland 1 142 1 308 Slvakia 1 075 1 700 Spain 3 317 3 633 Prtugal 1 642 1 883 Germany 5 150 6 442 France 4 283 4 983 Italy 3 308 4 025 EU28 (frm 2011) 3 558 4 242 Surce: Eurstat (2018): Annual detailed enterprise statistics fr industry
ROAD VEHICLE PRODUCTION (THOUSAND) 3 500 3 000 2 500 2 000 1 500 1 000 500 0 25 000 20 000 15 000 10 000 5 000 0 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Czech R. Hungary Pland Slvakia Prtugal Spain EU27 (right axis) Surce: OICA (2018): prductin statistics
AUTOMOTIVE EXPORT AS PERCENT OF THE TOTAL EXPORT 35 30 25 20 15 10 5 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 SPAIN PORTUGAL CZECH REP HUNGARY POLAND SLOVAKIA EU28 Surce: authrs calculatins based n Eurstat CmExt database (2018)
DIFFERENCES IN GLOBAL EMBEDDEDNESS SHARE OF EXTRA-EU EXPORT (PERCENT OF TOTAL, 2017) 40 35 30 25 20 15 10 5 0 CZECH REP HUNGARY POLAND SLOVAKIA SPAIN PORTUGAL EU28 Autmtive Ttal Surce: authrs calculatins based n Eurstat CmExt database (2018)
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
DIRECT AUTOMOTIVE MANUFACTURING EMPLOYMENT (NACE C29, 2005=100) 180 160 140 120 100 80 60 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Czech Republic Hungary Pland Slvakia Spain Prtugal EU28 (frm 2011) Surce: Eurstat (2018): Annual detailed enterprise statistics fr industry
COMPOSITION OF THE AUTOMOTIVE EXPORT BY MAIN PRODUCTS (2005 AND 2017) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% ES ES 2005 2017 SK SK 2005 2017 EU28 EU28 2005 2017 CZ CZ 2005 2017 PT PT 2005 2017 PL PL 2005 2017 HU HU 2005 2017 781 782 783 784 71321 71322 71323 77831 77833 77834 77835 62510 62520 62592 62593 62594 Vehicle exprts are numbers underlined. Surce: authrs calculatins based n Eurstat CmExt database (2018)
CHANGING GLOBAL PATTERN OF PRODUCTION FOR COMPANIES IN THE EXAMINED COUNTRIES (PERCENT) EU/Wrld EU6/Wrld EU6/EU 2005 2016 2005 2016 2005 2016 Daimler* 73.6 68.8 4.9 11.1 6.6 16.1 FIAT* 64.5 59.5 16.5 14.4 25.6 24.2 Frd** 33.4 17.3 6.2 6.2 18.7 35.6 General Mtrs 26.6 13.0 8.3 7.2 31.4 55.6 KIA-Hyundai 5.8 8.9 5.8 8.9 100.0 100.0 Nissan 14.6 11.3 5.5 2.2 38.0 19.3 PSA 83.3 67.6 20.2 31.8 24.2 47.0 Renault 82.3 52.6 19.2 17.1 23.4 32.4 Suzuki 7.0 7.2 7.0 7.2 100.0 100.0 Tyta 6.1 5.0 0.0 0.9 0.0 17.8 Vlkswagen 70.6 48.8 29.1 21.0 * withut Chrysler; **Saab ceased its prductin in 2012, Vlv was sld t Chinese Geely in 2010 41.2 43.1 Surce: authrs calculatins based n OICA (2018)
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 2018. 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.
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 2020. 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.
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.