23008_Nearshoring Report

In May 2022, Czech carmaker Škoda, part of Volkswagen, started manufacturing battery systems for all-electric vehicles based on Volkswagen’s Modular Electrification Toolkit (MEB) in Mladá Boleslav, north of Prague in Czech Republic. This is the only production facility for MEB battery systems in Europe outside Germany and battery systems will be installed in MEB models made by Volkswagen, Audi and SEAT as well as Škoda’s own vehicles. Škoda’s objective in its transition to electro-mobility is to “produce e-components or e-vehicles at all three Czech plants by 2030.” ŠKODA

Production of machinery and equipment has similarly grown in CEE countries with Poland, Czech Republic and Hungary within the top 10 countries exporting machinery and electrical equipment to other European countries. Manufacturers have cited some of the reasons for nearshoring production as improved quality control, shorter lead times for delivery of products, greater flexibility and lower transportation costs.

In November2022, BMW announced that it would double its investment in a new plant in Debrecen, Hungary, with an additional EUR 2 billion committed to adding an installation for battery pack assembly. As well as building all-electric vehicles based on the Neue Klasse platform, the 140,000 sqm site, which is expected to open by end 2025, will assemble battery packs using BMW’s next-generation round battery cells. These battery cells will be made by Chinese battery maker CATL which in Summer 2022, announced a EUR 7.4 billion investment in Debrecen to build a battery cell factory with annual capacity of 100 gigawatt hours. CATL said that the battery plant in Debrecen would enable the company to “better respond to … European customers’ needs and accelerate the transition to e-mobility in Europe”. BMW AND CATL

In 2019, German audio equipment manufacturer Sennheiser relocated part of its production capability from China to Brașov, in Central Romania; the new plant for assembly of professional and consumer electronics products complements facilities in Germany, Ireland and the United States. Key to Sennheiser’s decision to invest in the new plant were time savings in delivery, control of production and flexibility in adapting products to dynamic market requirements. One of the company’s main reasons to locate in Brasov was infrastructure, as well as its strong connection to the European economic zone. SENNHEISER

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