Published on 3 October 2017 by Julia Sadieva
Central and Eastern Europe is a growing manufacturing base for the international auto industry, as structural changes in western Europe have resulted in both manufacturers and their supply chains re-creating large networks throughout the CEE countries. The result is that nearly 1/3 of all vehicles produced in Europe are produced in the CEE countries. As a matter of fact, Slovakia and the Czech Republic rank 1st and 2nd in vehicles produced per 1000 inhabitants, producing 180 and 108 respectively. Mostly unknown is that Germany ranks 3rd with 70 units per 1000 inhabitants.
The driving factors behind locating in CEE are relative low cost of labour, availability of skilled workers, tax regimes and incentives. The region is now home to 16 OEM’s and a strong network of 1st and 2nd tier suppliers. Beyond serving the major manufacturers within the region, suppliers are also locating operations within CEE to serve the large manufacturers in Germany, just across the Czech and Polish Borders.
And the trend is expected to continue into the future. Both suppliers and manufacturers already operating in CEE are more likely to consider a new location either nearby their current CEE location, or to one of the other countries in the region as they expand their operations.
As the automotive industry undergoes transformative changes with the push into electric cars, connectivity and autonomous driving, the innovation required will have a major impact on the entire industry—both manufacturers and suppliers will need to either upgrade or develop new facilities to cope with the coming changes. FortyThree per cent of both manufacturers and suppliers recognize that they will have to adapt operations to accommodate new innovations in the industry. The advent of industry 4.0 is expected to impact production processes, with connected assembly lines, greater automation and connectivity, and the need for suppliers to deliver higher added-value parts with embedded sensors to pass on data to a more connected auto product.
As a major development partner to many companies in the automotive supply chain across central Europe, CTP has first-hand knowledge of the innovations effecting our clients in the industry. Older facilities are not up to the demands of industry 4.0 workspace. Companies are requiring facilities that incorporate greater technology in terms of climate control, clean rooms and a rethinking of space layout to accommodate the new technologies required in assembly.
As a long-term partner, we see directly how our current clients expand their operations, either by adding a new extension, or by looking at a different location within the CEE to adapt to the new trends. As we expect this trend to continue, we are getting ready to provide end-to-end solutions for our clients, across a wider geographical area gives our clients a greater choice when seeking out new locations.
CTP is unique in providing high-tech, customized solutions for a wide range of clients in the automotive industry. Our clients range from manufacturers of brakes, interior assemblies, body part moulding, sensors, lighting, seating systems among many many others. Many of our clients have chosen Central Europe not only for the lower cost of labour but also because of the skilled workforce in the university cities where they have set up R&D operations.
CTP has proactively sought out strategic locations near major auto manufacturers in the region to accommodate the needs of companies in the supply chain. In the Czech Republic we have suitable locations for access to the Škoda, Toyota (TPCA) and Hyundai plants; in Slovakia we have parks to accommodate the Kia, Volkswagen, Peugeot as well as the new Jaguar-LandRover plant that is under construction in Voděrady. With our recent expansion into Romania, Hungary and Poland, CTP has locations nearby manufacturers and local suppliers in these countries also.
CTP is unique in that we remain owners and operators of the buildings we build, and thus have an interest in ensuring they are well maintained to remain valuable over the long term. We therefore both re-invest in older facilities to ensure they meet our latest standards and have on-site park & facility managers to ensure damages due to an accident or aging are repaired and restored quickly.
We also work to lower the ongoing operational costs of our clients by constructing our buildings with the latest technology in terms of lighting, temperature control and insulation materials to name a few. Our buildings help lower operating costs, but also work to improve employee efficiency.
Our parks are both landscaped to provide a calming green environment outside, as well as onsite amenities such as local transport connections, shuttle bus services, onsite canteens and accommodation facilities where required.
Since 2011, all of our buildings are built to BREEM specifications, audited by third parties. This gives our clients comfort that they are working with a strong, reliable partner over the long term.
To discuss your needs and plans in Central and Eastern Europe, join us at our booth, or meet our delegates at the sponsored lunch. We’re looking forward to meeting you there and finding a solution that meets your needs, wherever you need to be in CEE.