Central and Eastern Europe
Relocation of ProductionForegin Direct Investment (FDI)Central and Eastern Europe (CEE)Country advantagesAutomotive IndustryThe Trelleborg GroupManagement of enterprisesFöretagsledningManagementBusiness and Economics
An increasing number of automotive supplier companies are investing in Central and Eastern Europe (CEE) in order to gain cost advantages. This has happened in a rapid pace since many of these countries did not have any foreign direct investments (FDI) at the turn of the century. The problem now is for how long these countries will be able to maintain the low costs. One purpose was to create a model of country advantages for automotive supplier companies when relocating further production to CEE. This dissertation was written in cooperation with the Trelleborg Group. Furthermore, the second purpose was to present the most favourable country for future relocation of production by means of the created analytical model. The factors in the analytical model were selected through the use of theory. Interviews were conducted with Swedish automotive supplier companies, Fordonskomponentgruppen and the Swedish Trade Council in the selected countries, to answer the research questions. After the interviews the modified analytical model was created which included the most important factors to consider when relocating further production to CEE in order to obtain cost efficiency. Collected primary and secondary data were put in the modified analytical model which was used when analysing the country advantages of each country. The analysed countries might not be the most attractive ones today, but since this dissertation is focusing in a future perspective, future developments of the factors had to be considered when analysing. The conclusion of the dissertation was that labour cost was the most important factor to consider when relocating production to CEE in order to obtain cost efficiency. Additionally, infrastructure and the extent of automotive cluster in the country were important factors. Further, political and macroeconomic factors affect these three factors which in turn affect the country advantage. Finally, the most favourable countries for further relocation of production in five years in order to obtain cost efficiency was Romania, Slovakia and Turkey.