Central European countries: production of VW's subcompact Up! surges in Slovakia

Daimler manufactures B-Class in Hungary; Fiat/GM production declines in Poland

2012/08/09

Summary

Vehicle production in Central Europe This Report outlines the recent activities of OEMs that produce vehicles in six Central European countries (Czech, Poland, Slovakia, Romania, Hungary, and Slovenia) (We added two countries - Serbia, where Fiat boosts production capacity, and Bulgaria, where Great Wall Motor builds a new plant).

 In these six countries, more than 3 million vehicles were produced per year from 2007. Production fell temporarily in 2009 due to recession, but in 2010, 3.42 million vehicles were produced. Yet, in 2011, due to concerns over financial credibility, sales in Europe, the largest export destination, fell and production declined slightly to 3.39 million units. In the first half of 2012, production fell by 2% y/y to 1.77 million units.

 Production in each country showed mixed results. In Slovakia, where VW produces the up! subcompact car and Kia produces the Sportage SUV, production in the first half of 2012 increased substantially. On the other hand, production fell in Poland, where Fiat, whose sales declined significantly in Europe, and FSO (which produces GM models) have plants. In Czech, where Skoda and Hyundai have production facilities, production fell slightly, but Czech is still the biggest car manufacturing country in Central Europe.

 The average wage in Central Europe is said to be one fifth of that in Germany. The importance of the region as a production site of vehicles has been increasing and production has been transferred from Western Europe. OEMs that recently built new production facilities in Central Europe include Daimler, which began production of the New B-Class at a new plant in Hungary in March 2012, and Great Wall Motor, which officially started operations of its KD plant in Bulgaria in February of the same year. Concerning plans to boost production capacity, Audi will increase production capacity in Hungary to 125,000 units/year (41,000 units in 2011) by 2013 and Fiat will upgrade its plant in Serbia to boost production capacity to 200,000/year (10,000 units in 2011).


Related Reports: Six central European countries (Jul. 2011)



1H 2012 vehicle production grew by 51% in Slovakia while it fell by 26% in Poland

 Concerning vehicle production in the six Central European countries in the first half of 2012, Czech maintained its top position in the region at 555,000 units. Vehicle production in Poland declined by 26% y/y to 406,000 units, which was surpassed by Slovakia, where 460,000 vehicles were produced (up by 51%).

 In Romania, as Ford's plant is preparing to change production models, production volume fell by 7% to 165,000 units. In Hungary, as Daimler started production of the B-Class at its new plant, vehicle production increased by 11% to 108,000 units. In Slovenia, since Renault's plant reduced production due to recession in Europe, vehicle production declined by 24% to 79,000 units.

Vehicle production in six central European countries

(units)
2007 2008 2009 2010 2011 Jan.-Jun.
2011
Jan.-Jun.
2012
Czech 937,648 946,567 983,243 1,076,385 1,107,175 588,111 554,731
Poland 869,536 1,005,707 1,024,054 1,045,035 969,651 544,920 405,687
Slovakia 528,163 527,420 413,519 514,986 578,435 304,434 460,376
Romania 241,712 245,308 296,498 350,912 335,232 177,679 164,590
Hungary 296,072 349,785 229,508 211,310 217,498 97,596 108,198
Slovenia 198,402 197,843 213,971 218,940 181,164 103,616 79,057
Total 3,071,533 3,272,630 3,160,793 3,417,568 3,389,155 1,816,356 1,772,639

Source: Automobile manufacturers associations of respective countries and other sources, covering all vehicles including heavy-duty trucks and buses
(Note) The figures for 2011 and later of Czech, Poland and Hungary do not include heavy-duty trucks and buses.

 



1H 2012 passenger car sales were up 5% to 367,000 in six central European countries

 In the six Central European countries, sales volume of passenger cars surpassed 1 million units in 2007-2008, but continued to decline for the three years from 2009 to 740,000 units in 2011. In the first half of 2012, passenger car sales were up by 5% y/y to 367,000 units.

Passenger car sales in six central European countries

(units)
2007 2008 2009 2010 2011 Jan.-Jun.
2011
Jan.-Jun.
2012
Czech 174,456 182,554 167,708 169,580 173,595 88,284 94,233
Poland 293,305 320,040 320,206 333,490 297,937 138,677 149,192
Slovakia 59,700 70,040 74,717 64,033 68,254 34,183 34,316
Romania 315,621 270,995 130,195 106,333 94,619 31,758 33,343
Hungary 171,661 153,278 60,189 43,476 45,094 23,168 27,781
Slovenia 68,719 71,575 57,967 61,142 60,193 32,942 28,327
Total 1,083,462 1,068,482 810,982 778,054 739,692 349,012 367,192

Source: ACEA (European Automobile Manufacturers' Association); the figures for Jan.-Jun. 2012 are taken from provisional reports.


Passenger car sales in Central Europe

 



Production facilities of major automakers

Production facilities of major automakers (six central European countries and Serbia and Bulgaria)

Country Automaker Location Main production model Annual
production
capacity
Production (units)
Jan.-Jun.
2011
Jan.-Jun.
2012
Czech Hyundai Nosovice Hyundai i30 hatchback,
i30 wagon, ix20/Kia Venga
300K 116,574 120,251
Skoda Mlada Boleslav Skoda Octavia, Fabia,
(from 2H 2012)
Skoda Rapid/SEAT Toledo
800/day→
1,200/day
(Jan. 2012)
313,102 311,709
Kvasiny Skoda Roomster, Superb,
Superb Combi, Yeti
200K
Vrchlabi Skoda Octavia, Yeti 250K
Toyota/PSA Kolin Toyota Aygo/Peugeot 107/
 Citroen C1
330K 158,435 122,771
Poland Fiat Tychy Fiat Panda, 500/
Lancia Ypsilon/Ford Ka
530K 268,722 207,210
GM Gliwice Opel Astra, Zafira 200K 102,085 92,558
FSO Warsaw (until 2H 2011) Chevrolet Aveo/
Daewoo Lanos, Matiz
150K 96,501 33,096
VW Poznan VW Transporter, Caddy 155K 77,612 72,823
Slovakia Kia Zilina Kia cee'd, Sportage/
Hyundai ix35
300K 127,465 160,435
PSA Trnava Peugeot 207, (from May 2012) 208/
Citroen C3 Picasso
300K 110,812 127,183
VW Bratislava VW Touareg/Audi Q7,
(from Q2 2012) VW up!/
Skoda Citigo/SEAT Mii
(also manufacturing the bodies of Porsche Cayenne)
400K 66,157 172,758
Romania Ford Craiova (until the end of 2011)
Ford Transit Connect,
(from Jun. 2012) B-MAX
300K 4,675 0
Dacia Pitesti Renault/Dacia Logan,
Sandero, Duster
350K 172,962 164,577
Hungary Suzuki Esztergom Suzuki Swift, SX4, Splash/
Fiat Sedici/Opel Agila
210K 72,966 76,559
Audi Gyor Audi A3 Cabriolet, RS3,
TT Coupe, TT Roadster,
(in the future) A3 derivative
85K→
125K
(2013)
24,630 20,348
Daimler Kecskemet (from March 2012) M-Benz B-Class,
(in the future) compact 4-door coupe
120K 0 11,291
Slovenia Renault Novo Mesto Renault Clio, Twingo, Wind 210K 103,616 79,057
Serbia Fiat Kragujevac Fiat Punto,
(from 2H 2012) Fiat 500L
200K (full-year
2011)
10,227
n.a.
Bulgaria Great Wall Lovech (from February 2012) Voleex C10,
(from 2H 2012) Wingle 5,
Haval H6, Voleex C20R
50K 0 n.a.

Source: Websites of respective automakers and others; production volumes are taken from automobile manufacturers association of respective countries and INOVEV (Mavel) data

 



Czech Republic: Hyundai's 1H 2012 production increases by 3% while that of Toyota/PSA declines by 23%

 In the Czech Republic, OEMs including Skoda, Hyundai, and Toyota/PSA produced 555,000 vehicles in the first half of 2012, down 6% y/y; the Czech Republic is the largest car manufacturing country in Central Europe.

 The three plants of Skoda, which are under the umbrella of VW, produced 312,000 units, which is about the same level y/y. Hyundai's Nosovice plant, which increased production of the New i30, produced 120,000 vehicles, up 3%, in the first half of 2012. On the other hand, the demand for Toyota Aygo compact car, which Toyota/PSA produces at its joint venture plant, and for its sister model under Peugeot/Citroen brand, decreased due to concerns over financial credibility in Europe; Toyota/PSA's production volume fell by 23% to 123,000 units.

Skoda produces the Rapid new sedan at its Mlada Boleslav plant

 In June 2012, Skoda announced the outline of a new sedan, the Rapid. The new model adopts the extended version of VW Polo's platform. It is 4,480mm in overall length, which is between the Fabia and the Octavia. The Rapid is a 5-seat model. The model is a core model under Skoda's "2018 growth strategy (in which it will sell 1.5 million vehicles worldwide by 2018. In 2011, it sold 880,000 units)". Skoda produces the model and its sister model, SEAT Toledo, at its Mlada Boleslav plant in Czech. The models will be introduced in Europe starting in the fall of 2012. Skoda also plans to produce and sell the model in China starting in 2013.
Skoda produces a 7-speed dual-clutch transmission starting in September 2012, boosting production capacity by 50% in 2013
 In September 2012, Skoda will start production of a 7-speed dual-clutch transmission, DQ200, at its Vrchlabi plant in Czech. The initial production volume is 1,000 units/day. Skoda will boost production capacity by 50% in the middle of 2013 and will increase production to 1,500 units/day. (announced in May 2012).

 

Hyundai boosts production capacity of vehicles by 50% to 300,000 units/year and of transmissions by 66% to 500,000 units/year

 In June 2011, Hyundai invested 3.5 billion koruna (about USD212 million) in its Nosovice plant in Czech and conducted expansion work in order to boost production capacity of vehicles from 200,000 to 300,000 units/ year. Hyundai also employed an additional 900 workers in September 2011 and started a 3-shift operation.
 In June 2012, the car maker started operations of its second transmission plant, employing 97 new workers. It increased production capacity of transmissions from 300,000 to 500,000 units/year (It also supplies products to Kia's Zilina plant in Slovakia).
Hyundai starts production of the hatchback/wagon of the New i30 at its plant in Czech
 Hyundai started production of the New i30 5-door hatchback, which it announced at the Frankfurt Motor Show in September 2011, at its Nosovice plant in the Czech Republic and launched it in Europe at the beginning of 2012. The R&D center in Russelsheim, Germany took charge of its design and development. The new model adopts Hyundai's new design concept, "fluidic sculpture". Four engines are available. The CO2 emission of a 1.6-liter diesel model is less than 100g/km. The sales target is 120,000 units/year. In June 2012, Hyundai won orders for 57,000 units.
 Hyundai also began production of the New i30 wagon, which it unveiled at the Geneva Motor Show in March 2012, at its Nosovice plant in Czech in June 2012. The R&D center in Europe also designed the i30 wagon. The model shares the dynamic style and the powertrain with the hatchback version, but the overall length is 4485mm, which is 185mm longer, and the cargo space is 528L, which is among the largest in its class. The wagon version is expected to account for about 30% of the total sales of the New i30.

 

Toyota/PSA reduces 250 workers through voluntary retirement

 Production by Toyota/PSA's joint venture plant in the Czech Republic declined by 23% y/y to 123,000 units in the first half of 2012 due to recession in Europe. The plant says that it will start a voluntary redundancy program and will cut 250 personnel.

 

 



Poland: 1H 2012 vehicle production falls by 26% as production by Fiat's plant declines

 In the first half of 2012, Poland's vehicle production declined significantly by 26% y/y to 401,000 units. In particular, production by Fiat's plant fell by 25% since it produces the 500, whose sales declined due to concerns over financial credibility in South Europe, and the Panda, which is in the final-stage of the product-life-cycle (The New Panda, which was launched in January 2012, is produced at the Pomigliano d'Arco plant in Italy). In addition, production by the FSO plant, where GM discontinued production of the Chevrolet Aveo, declined by about 60%.

GM discontinues production of Chevrolet Aveo at FSO plant in Poland

 GM discontinued production of the Chevrolet Aveo at the FSO plant in Poland in the middle of 2011. It says that this is because it produced the planned number of the model, but this is also because the sales of the Aveo did not increase as expected due to a worldwide recession. The FSO plant is owned by Ukraine-based UkrAvto; no new production plan is decided. Talks about the production of GM's other model failed. The plant is said to be talking with Chery Automobile or Mahindra & Mahindra.
GM produces New Astra at its plants in UK and Poland starting in 2015
 In May 2012, GM announced that it would produce a new model of the Astra, Opel's core small car, at Vauxhall's Ellesmere Port plant in the UK, and Opel's Gliwice plant in Poland starting in 2015. The car maker will invest 300 million Euros in the two plants in order to introduce the latest facilities for the production of the new model. The current Astra is produced at the Ellesmere Port and Gliwice plants and at the Bochum plant in Germany and the Opel's Russelsheim headquarters plant, but the production of the new model will be concentrated in the UK and Poland.

 

 



Slovakia: starts production of VW up!, Skoda Citigo, and SEAT Mii

 In Slovakia, Kia, PSA, and VW have plants. In the first half of 2012, Slovakia's vehicle production totaled 460,000 units, up by 51% y/y. In particular, VW increased production significantly by 2.6 times y/y to 173,000 units because the production of the Touareg SUV increased and the production of VW up!, Skoda Citigo, and SEAT Mii subcompact cars began.

VW starts production of VW up!, Skoda Citigo, and SEAT Mii subcompact in second half of 2011

 In the second half of 2011, VW started production of the VW up!, a low-priced subcompact hatchback that boasts low fuel consumption, at its Bratislava plant in Slovakia. The Bratislava plant also produces its sister models - Skoda Citigo/SEAT Mii. The VW up! (3,540mm x 1,640mm x 1,480mm) is a 4-seat model. Its powertrain combines two types of newly-developed 1.0-liter 3-cylinder gasoline engine and a 5-speed MT. VW will launch a 3-door model first and then a 5-door model. VW invested 308 million Euros in 2011 in the production of the model and enhanced its production facilities and boosted production capacity by 43% to 400,000 units/year.
 VW says that it aims to produce 400,000 units/year in 2012 and 2013 by operating the Bratislava plant in Slovakia to full capacity.
VW plans to invest 1.5 billion Euros in Slovakia over five years to 2016
 VW announced that it would invest 1.5 billion Euros in order to enhance production of vehicles and parts in Slovakia during the five years from 2012 to 2016 (announced in July 2012). The SUV plant, whose cornerstone laying ceremony was held in July 2012, is scheduled to start operations in 2014. VW plans to employ 500 new workers.

 

PSA sets up production capacity of 300,000 units/year, starting production of Peugeot 208

 PSA invested 120 million Euros in its Trnava plant in Slovakia at the beginning of 2012 and employed 900 new workers. It has a 3-shift operation in order to boost production capacity to 300,000/year (PSA employed 3,000 workers and had a 2-shift operation, producing 176,000 vehicles in 2011). It started production of the 208 in the B segment in May 2012, which is the successor of Peugeot's best selling model, the 207.

 

 



Romania: Ford starts production of the B-MAX compact MPV

 In Romania, Renault (Dacia) and Ford have their plants. In the first half of 2012, Romania's vehicle production declined by 7% y/y to 165,000 units. Ford transferred production of the Transit Connect light commercial van in Romania to Spain and started production of the B-MAX compact MPV at its plant in Romania in June 2012.

Ford produces B-MAX at its Craiova plant

 In June 2012, Ford started production of the B-MAX compact MPV at its Craiova plant in Romania. It invested more than 500 million Euros to upgrade the production facilities of the plant. The B-MAX is a B-segment new MPV that is based on the Fiesta compact car. A sliding door that includes a B pillar is adopted for the rear door; the opening is 1500mm or more. The model is equipped with advanced safety equipment and a telematics system. Ford will start marketing the model throughout Europe in the second half of 2012.
Ford starts production of the 1.0-liter EcoBoost engine at its Craiova plant, starting production of a 1.5-liter engine at the beginning of 2013
 Ford invested about 175 million Euros in its Craiova engine plant to upgrade its facilities and started production of a fuel-efficient 1.0-liter EcoBoost engine to be used in the B-MAX in May 2012. The fuel economy and the CO2 emissions of the B-MAX with this engine (120PS) is 4.9L/100km and 114g/km, respectively, which are among the best in the class.
 Ford will start volume-production of a 1.5-liter gasoline engine as a second engine to be produced at the Craiova plant at the beginning of 2013 (announced in June 2012).

 

(Reference) Dacia launches the Lodgy new MPV at 9,900 Euros, producing it at Renault's plant in Morocco

 Dacia announced the Lodgy new MPV at the Geneva Motor Show in March 2012 and then started marketing it in Europe. The model is a 5-/7-seat MPV (4,500mm in overall length). The selling price in France is 9,900 Euros. It has a wide interior and the foot space of the third-row seat is the widest in the class. Two types of gasoline engines and two types of diesel engines are available. The model is equipped with advanced equipment including a touch-screen navigation system and a speed limiter. Dacia produces the model at Renault's Tanger plant in Morocco for the first time, not at its plant in Romania.

 

 



Hungary: Daimler begins production of B-Class at its new plant

 In Hungary, Daimler started production of the B-Class at its new plant in March 2012. The combined production volume with Suzuki and Audi in the first half of 2012 is 108,000 units, up 11% y/y. Currently, Audi is also expanding its plant, planning to boost production capacity from 85,000 to 125,000 units/year in 2013.

Daimler starts production of M-Benz New B-Class at Kecskemet plant

 In March 2012, Daimler opened the Mercedes-Benz plant, which had been constructed in Kecskemet, Hungary, and started production of the New B-Class. Daimler invested 800 million Euros in the new plant. The new plant is capable of producing 120,000 units/year. The plant currently employs 2,500 workers, which it plans to increase to 3,000 by the end of 2012. The New B-Class, which was launched in November 2011, was initially produced only at the Rastatt plant in Germany, but will be manufactured at these two plants.
 The Kecskemet plant plans to produce a compact 4-door coupe following the New B-Class.

 

Audi starts expansion work of Gyor plant, boosting production capacity to 125,000 units/year in 2013

 In July 2011, Audi started expansion work of its Gyor plant in Hungary. Audi purchased a 200-hectare site adjacent to its existing plant, and is planning to construct stamping, body, and painting plants, and assembly lines, thus capable of start-to-finish production. The total investment is worth 900 million Euros. Audi will employ 300 new workers and expects to hire 2,100 new personnel in the next few years. The Gyor plant will produce another derivative model of the A3 in the future. It plans to boost production capacity to 125,000 units/year in 2013.

 

 



Slovenia: Renault reduces workforce at its Novo Mesto plant as it suffers slumping sales in Europe

 In Slovenia, Renault is the only OEM that produces vehicles. In the first half of 2012, vehicle production was down by 24% y/y to 79,000 units because sales of compact cars produced in Slovenia including the Clio, the Twingo, and Roadster Wind declined due to recession in Europe. In April 2012, Renault started reducing production at its plant in Slovenia as it cut 13% of the personnel and discontinued its night shift.

 Renault expects to increase the number of workers again in the second half of 2013 since it will start production of the New Twingo and the new smart forfour, which adopt a platform that is jointly developed with Daimler.

Renault will not develop new model of Roadster Wind coupe

 In January 2012, Renault announced that it would not develop a new model of its 2-seat coupe Roadster Wind, which it produces at its plant in Slovenia. Although it targeted to sell 75,000 units of the model, which it launched in 2010, it sold 6,500 units in 2011 and only 1,200 units in the first half of 2012.

 

 



In Serbia, Fiat boosts production capacity while in Bulgaria, Great Wall Motor starts operations of its new plant

 In Serbia, Fiat formed an alliance with a state-run OEM, Zastava, and started licensed production of the Punto in 2006. In 2008, Fiat established a joint venture company with the Serbian government and took over Zastava's Kragujevac plant. In April 2012, it completed the upgrading of the plant and opened a new plant that is capable of producing 200,000 units/year.

 In Bulgaria, Great Wall Motor started operations of Bulgaria's first assembly plant in February 2012. The plant is capable of producing 50,000 units/year.

Fiat opens new plant in Kragujevac, Serbia, producing 500L

 In April 2012, Fiat opened its new plant in Kragujevac, Serbia. It invested 1 billion Euros in improving the infrastructure and land in the vicinity of the plant as well as in the building and facilities of the plant. Fiat spent three years upgrading the Zastava's plant significantly. The site area is 1.4 million square meters. The new plant produces Fiat 500L MPV, which was announced at the Geneva Motor Show in March 2012. Fiat will begin exporting the 500L in Europe and around the world in the fourth quarter of 2012.
 The new plant plans to employ 2,400 workers by the end of 2012. In addition, suppliers are expected to employ 1,000 new workers. The new plant is capable of producing 200,000 units/year when it operates at full capacity.

 

Great Wall Motor officially starts operations of its plant in Bulgaria

 In February 2012, Great Wall Motor officially started operations of its KD plant, which it had jointly constructed in Lovech, Bulgaria, with a local partner, Litex Motors. The site area is 500,000 square meters. The plant employs about 120 workers. It produces 8,000 units in the first year, but is capable of producing 50,000 units/year when it operates at full capacity. The plant begins with production of a compact hatchback, the Voleex C10, and then plans to introduce the Wingle 5 pickup, the Voleex C20R crossover, and the Haval H6 SUV. Great Wall Motor initially markets the product in Eastern Europe and Turkey, and then plans to expand sales to other regions in Europe.


(Source: Press releases of above companies and various media reports)

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