Automotive industry: typical or specific sector of Central European manufacturing?

Type de publication:

Conference Paper


Gerpisa colloquium, Bordeaux (2024)


The role of Central European countries in the automotive production of the European Union has been growing for a few decades. The question is to what extent the features and trends observed in the motor vehicle industry are typical for the broader manufacturing activities in Central Europe or rather specific to one sector. The authors compare the situation in the automotive industry with this in other sectors in six countries: Poland, Czechia, Hungary, Romania, Slovakia, and Slovenia. All of them have generally enhanced their position in the EU manufacturing, which is particularly evident in their growing exports and increasing surplus in the trade of manufactured goods with the core Western European economies of Germany, France and Italy. This is fuelled by continuously higher investment rate in Central Europe and is part of the advancement of the entire socio-economic system of the region since the 1990s. Although the motor vehicle industry, and the production of automotive components in particular, belong to the sectors where the position of Central Europe is especially prominent, it is also very important in other sectors such as the manufacture of electrical equipment, computer, electronic and optical products, furniture, rubber and plastic products. What is important, the share of the automotive industry differs considerably among Central European countries. Slovakia is extremely dependent on the sector, which represents more than a third of its manufacturing output, it is also dominant in several other countries such as Czechia, Hungary and Romania, where is comprises between one-fifth and one-fourth of the production. By contrast, Poland and Slovenia show a more diversified structure of manufacturing activity as the contribution of the automotive industry is like that of France and Spain (about one-tenth). The automotive industry is one of the most dominated by foreign-owned producers in all the EU countries except for Germany, France and Italy. There share is usually between 80% and 90% of value added, for example in Spain, Belgium, Czechia and Poland, but reaches as much as 96-97% in Slovakia and Hungary. Other sectors where foreign-controlled enterprises predominate in the CE countries are the manufacture of computers, electronic and optical products, electrical equipment (including domestic appliances), other transport equipment, tobacco products, beverages and paper. The overall dependence on foreign-owned firms in manufacturing exceeds two-thirds in Slovakia, Hungary, and Romania, being only slightly less in Czechia. The proportion of foreign-controlled enterprises is smaller in Poland and Slovenia, where it is is similar to that in Sweden and the Netherlands (about 40%), much less than in Belgium. Domestic manufacturers predominate in most sectors of Polish and Slovenian manufacturing. Despite a dynamic growth of productivity in Central European manufacturing in the past three decades, it is still 10-30 percentage points lower than in Spain, Italy and France. The major gap in relation to the Western European core economies is in the business enterprise expenditures on research and development. At the same time, there has been a rise in real wages in the automotive industry above the manufacturing average. Their growth was particularly fast with mounting labour shortages in the decade 2009-2019, contrasting with a very limited increase in the EU as a whole and a decline in real terms in Italy and Spain. Although wages remain nominally lower than in Western Europe, at purchasing power standards they are already higher in Slovenia than in Italy, while in Poland are only about 15% below the Spanish and Italian levels.

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