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PwC: Eastern car production needs research

Automotive companies that plan to move production eastwards must select the correct region in a country in order to establish a successful manufacturing base.

Around $6 billion (€4.45 billion) worth of automotive production will be transferred to central or Eastern Europe over the next five years and choosing the correct region will be vital to companies' future success. According to a report from PricewaterhouseCoopers (PwC), differences at a national level, such as employment laws and tax regimes, are easy to identify but comparing local characteristics is more difficult. They include the availability of skilled local labor, planning regulations and quality of utilities, which can all either make or break a successful move. „Choosing the right location is a time-consuming exercise but one in which local knowledge is absolutely essential,” said Matt Pottle, central and Eastern Europe automotive leader for PwC. „It is only once the right place has been identified that an automotive company can start to manage the transition from one factory to another.” The report also found that cheaper labor costs was a major driving force in moving production east. In the top 15 European Union countries the average monthly labor cost is $3,658 (£1,851). In Bulgaria it is 6% of that figure, 11% in Romania and 43% in Slovenia. (