European Integration and Industrial Actors’ Location and Investment Decisions in the CEE Automotive Industry: What Types of Changes Are Likely To Be Brought by Industry 4.0?

Europe remains relevant in the globalautomotive industry. The Central and EasternEuropean (CEE) countries’ role is influential: theycontribute to European competitiveness throughcost-based advantages in a fairly developedtechnological and business environment. Howhave the location advantages of CEE evolvedand been affected by European integration?How may the changes linked to Industry 4.0influence location and investment decisions inthe industry? With the help of the trade costsconcept interpreted in the broad sense, weanalyse these changes from the viewpoint of theautomotive industry. We show that, as a resultof European integration, automotive companiesand their suppliers by now consider the whole ofthe EU as a single, fully integrated space. Thenwe show how the various elements of Industry4.0 may transform trade cost components. Theresults of our analysis are double-checked andsupplemented by information gained fromcompanies. Our conclusion is that the enhancedapplication of the various elements of Industry4.0 in the practice of companies indeed affectstrade costs.