The Motor Industry in an Enlarged EU
The motor industry in the 'First Fifteen' EU makes an enormous contribution to its economic prosperity. This is manifest in the scale of employment, output, investment, international trade and technological change. The enlargement of the EU will see the full integration of the auto sector in the accession countries with the activities in the West to reinforce its already massive scale. The nature of optimum size and the importance of economies of scale creates a bias to bigness in vehicle manufacture. Hence, the auto industry in the accession countries consists largely of the local operations of transnational companies. As car demand is income elastic the level of sales in the accession countries is relatively small but as the economies expand the potential is enormous. This, together with non-scaler advantages such as low wage rates, has attracted considerable investment by vehicle firms in the last fifteen years into the accession countries. Various tariff reduction agreements have meant that integration of the East Central European motor industry with Western operations has pre-dated the current formal enlargement of the EU. The countries that have done particularly well in attracting automotive investment have been Poland, the Czech Republic and, particularly, Slovakia. The recent history of the auto sector in the accession countries has not been without its problems. The collapse of the command economies saw disruption in the market and the decline of the local indigenous car makers. Subsequently this was more than offset by new inward investment. There has been no revival of the local commercial vehicle industry and further restructuring can be expected. The long-term survival of the auto component sector in the accession countries will depend on how the sector responds to the competitive challenges of free trade and enlargement. However, there are signs that significant high value-added activities such as vehicle design and development, will be sustainable in East Central Europe. The motor industry in the accession countries will face its own challenges, not least the tendency of the industry to anticipate formal integration. This time it will mean expansion into Eastern Europe. Hence, whilst the location of vehicle plants in the accession countries challenges the traditional centres of manufacture in the West, including 'the periphery', in turn they must be alert to even newer competition elsewhere. Copyright Blackwell Publishing Ltd 2004.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 27 (2004)
Issue (Month): 6 (06)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0378-5920|
When requesting a correction, please mention this item's handle: RePEc:bla:worlde:v:27:y:2004:i:6:p:877-900. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.