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A new thought leadership series from PricewaterhouseCoopers' Automotive Practice
As the automotive industry comes under ever greater pressure to control costs and the expansion of the European Union (EU) opens up new, more economical manufacturing locations, a growing number of carmakers and components suppliers are moving east. Indeed, research by PricewaterhouseCoopers suggests that about US$6 billion worth of automotive production will be transferred to Central and Eastern Europe over the next five years. The Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia will attract the bulk of this investment.
But relocating to another region is neither easy nor is it necessarily right for all companies -- and the smaller the firm, the fewer the management resources it can deploy in planning the move. The big carmakers and their largest Tier 1 suppliers have already spread across the globe and can call on past experience. A small manufacturer stepping outside its homeland for the first time is likely to find the prospect much more daunting -- and the impact much worse, if something goes wrong.
Part 1: A growing number of automotive manufacturers are migrating to Central and Eastern Europe. But are they doing the right thing?
In this, our first paper on setting up production facilities in Central and Eastern Europe, we discuss the continental drift of the past few years. We also look at the factors any manufacturer should consider before it decides to follow in the tracks of those that have already headed east.
Part 2: How should an automotive manufacturer that has decided to move to Central and Eastern Europe go about choosing the right location for its needs?
What if a company decides to go ahead and take the plunge? Where, precisely, should it go? Our second paper covers the issues involved in choosing the right location. The decision is a complex one, not least because understanding of the region is still quite limited, despite the 16 years that have elapsed since the end of Communism. Moreover, finding the right location for a manufacturer's needs is not just a matter of selecting the right country, it is also a matter of selecting the right place within the right country.
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