23008_Nearshoring Report

They are within close proximity to markets of consumption (and therefore enjoy lower transport costs and shorter lead times ) with good transport infrastructure. And because they sit within the EU or are party to free trade agreements between non-EU countries, moving goods from these countries means little to no import costs or limitations . CEE countries have proved highly attractive to automotive manufacturers and a significant value of chain of secondary and tertiary OEMs as well as primary manufacturers has developed over several decades. Car producers such as Volkswagen (under its own marque and through its subsidiaries including Škoda), Stellantis, BMW and Mercedes have established significant presence through the supply chain across the region especially in countries such as Czech Republic, Slovakia, Poland and Hungary. As product lines develop in automotive industries, particularly in EVs and other non-fossil fuel vehicle types, nearshoring efforts to bring production closer to primary manufacturing plants and to the markets of consumption will drive opportunities for new investment in these geographies. The majority of current facilities tend to be located in proximity to the German and Austrian borders or with good transport links to distribute finished vehicles to Western Europe but in the future, opportunities will likely be led by a combination of proximity to primary plants and/or transport infrastructure, appropriate land or buildings and crucially, appropriately skilled staff.

CENTRAL & EASTERN EUROPEAN COUNTRIES Central and Eastern European countries – especially those within the EU – have attracted major investment in manufacturing in recent years, particularly because they offer a significant cost differential to Western European locations, especially for labour.


In December 2022, German automotive producer Mercedes-Benz announced that, subject to sign off on subsidies, it would be investing over EUR 1 billion in building its first plant to exclusively produce electric vans at its existing combustion engine and EV battery manufacturing facility in Jawor, in south-western Poland. In creating the new factory alongside the existing one, Mercedes-Benz said that it would “help [to] ensure long-term competitiveness” by using “the excellent conditions and common infrastructure at the established Jawor location” and that it aims to “achieve productivity advantages and thus significantly improve its competitiveness”. It said that the established location will enable optimisation of costs and the supply chain as well as energy efficient production.



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