The key to success among eastern Europe's automotive industries will lie in their ability to fit into a global manufacturing strategy, according to the latest report from the Economist Intelligence Unit (http://store.eiu.com/auto.asp), "The automotive industry of central and eastern Europe: perspective to 2005". Progress toward this goal is very advanced in the CEFTA (central Europe) countries, where all car manufacturing and most component production is now owned by foreign, mostly multinational companies. The planned accession of most of the CEFTA countries to the EU by around 2005 will further serve to accelerate the trend of global integration for the automotive industries in central Europe.
  • Passenger car output in central and eastern Europe is forecast to grow from 2.3m units in 1999 to almost 3m units in 2005-an increase of 30%.
  • Commercial vehicle output recovered rapidly in 1999 after a major collapse in the mid 1990s, but further progress will be moderate with production rising by only 5%, to 321,000 units by 2005. Many of the communist regime producers are forecast to disappear.
  • The balance in the region's car output has shifted clearly towards central Europe and away from the CIS countries. Output in CEFTA tripled between 1991 and 1998, exceeding CIS car output, which shrank in the same period. This gap is set to widen further.
  • Russia, Poland and the Czech Republic will account for almost 75% of total output in 2005.
  • The front-line EU accession countries, Poland, Hungary, the Czech Republic and Slovenia, will begin to suffer the full onslaught of competition from EU producers as the final tariff barriers are removed. Whilst this will not affect the size of the markets in these countries, local producers will see their market shares slowly eroded.

Central and eastern Europe: passenger car production by country, and total commercial vehicle production, 1998-2005.('000)

1998
1999
2000
2001
2002
2003
2004
2005
Belarus
1
1
2
5
10
10
10
10
Bosnia & Hercegovina
0
2
4
8
10
10
10
10
Czech Republic
373
330
330
360
370
400
420
450
Hungary
89
113
140
145
142
140
142
142
Poland
583
650
700
730
740
750
750
750
Romania
103
95
110
110
120
140
149
154
Russia
833
850
900
900
900
950
1,000
1,000
Slovakia
125
110
180
200
220
220
220
220
Slovenia
128
110
110
110
110
110
110
110
Ukraine
24
10
20
30
30
40
40
40
Uzbekistan
45
35
40
50
60
70
80
90
Yugoslavia
5
0
5
10
10
10
10
10
Total cars
2,309
2,306
2,541
2,658
2,722
2,850
2,941
2,986
Total cvs
262
306
300
304
306
308
318
321

The manufacturers Central and eastern Europe: passenger car production by leading manufacturer, 1998-2005 ('000)

1998
1999
2000
2001
2002
2003
2004
2005
Volkswagen/Audi/Skoda
569
482
584
650
694
736
750
750
AvtoVAZ a
595
630
660
660
670
670
670
670
Fiat
334
350
360
360
360
360
360
360
Daewoo
198
215
245
250
260
260
330
350
GM
35
70
100
140
160
170
180
190
Renault
128
115
120
120
125
130
135
140
Dacia (Renaultb)
88
90
100
100
105
120
125
130
Total c
2,309
2,306
2,541
2,658
2,722
2,850
2,941
2,986
Source: EIU
 
  • Volkswagen's regional car output is set to surpass that of traditional leader AvtoVAZ, (maker of Lada vehicles) making it the highest volume car producer in the region by 2002.
  • The western involvement in the regional car market is dominated by five manufacturers: Volkswagen, Fiat, Daewoo, Renault and GM, and this is likely to continue throughout the forecast period, although individual companies' respective strengths will change.
  • Magyar Suzuki in Hungary remains the only Japanese car plant in the region. The Japanese manufacturers exhibited extreme caution toward the whole of central and eastern Europe in the early 1990s, but have latterly begun to show greater interest. Toyota is to make a major investment in a transmission facility in Poland, and Isuzu plans to build its new diesel engine plant there.
  • Many of Daewoo's ventures in the region have encountered difficulties. There is currently speculation that GM is the most likely to step in to take over a major share of the ailing company, although not necessarily all of it. The fact that Daewoo's operations in Poland, the Czech Republic, Romania, Uzbekistan and the Ukraine are not closely linked, or interdependent, could allow access for other prospective purchasers or partners.

The market Central and eastern Europe: total new passenger car and commercial vehicle sales, 1998-2005.('000)

1998
1999
2000
2001
2002
2003
2004
2005
Total cars
1,927
1,915
2,066
2,246
2,400
2,570
2,722
2,879
Total cvs
354
359
393
422
469
506
531
558
Source: EIU
  • The passenger car market in central and eastern Europe is forecast to increase by over 50% by 2005, to reach 2.88m units.
  • Russia and Poland alone will account for over 60% of car sales.
  • The Polish market will pause for breath after its dramatic increases in recent years, but it will still keep well in advance of most other markets in the region.
  • Truck sales are forecast to increase by 55% between 1999 and 2005, to reach over half a million units, after suffering a significant drop in 1994 and 1995. The strongest growth will be in Russia. Western imports are forecast to increase markedly.
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