economy
- 1. TITLE OF THE CASE : European union : Car Markets PROTAGONIST OF THE CASE : Automobile Industries Presentation on- Car Production Surges in Eastern Europe
- 2. After collapse of Communism many foreign car makers rushed to countries like Slovakia, Poland, Hungary, Romania and Czech Republic and build their own factory . Czech Republic has doubled its production over last year ,to more than a million cars Eastern Europe has become Europe backyard manufacturing center and it could be producing 3.4 million cars annually Growth established by Car making Industry : Russia -1.2 to 1.63.4 US-12.6 million(increased by 9%) Japan-10.3 million(increased by 2%) Britain-1.8 to 1.5(dropped) France-3.6 millions(stagnant)
- 3. When Volkswagen stopped its production that is 4000,people were unemployed. In the same way Peugeot unemployed 11000 people. As Europe, Asia, US did the fresh investment into local factories which increase their vehicles by 2.4 million. General motors, Toyata,Volkswagen,Peugeot, Fiat etc. announced to employ people for expansion of their plant in the region. Skoda in the Czech republic and Dacia in Romania has championed in local auto markets. After 1989,Volkswagen acquired Skoda and Renault bought Dacia.
- 4. Labour were cheapest, high gas prices encouraged people to shift from big cars & SUVs to kind of compact cars. In Eastern Europe government offers incentives by offering low flat and simple tax as done in Slovakia where taxes are 19%. In central European countries manufacturing job has risen to 2,84,507 in 2004. The largest challenge in the shortage of potential labor ,so the price of labor are rising.
- 5. European car markets have introduced variety of new models like four door car assembled in Romania by Renault. Peugeot officials said that steel coils comes from mills in France, German and Austria but they planned to begin using Slovak steels online. Eastern Europe countries entered the region of Western Europe without duties, erasing the borders of automotive industries. According to automotive news Europe GM expects to double its sales in central & eastern Europe including Russia in next 3 years and expand from 80 to 480.
- 6. Conclusion The decision to move assemble plant east raised awkward questions among workers and their labor union representatives in the west. If they cut wages and benefit, people will find another job said by Mr.OBoyle. Ryton was closed because of least profitable factory. Unemployment dropped from 13% to 5% three years ago. People are doing good job and there are good social benefit so there is no need of unions.