Euroviews. Faced with China, Central Europe’s automotive sector is playing catchup

A sense of foreboding grips Central Europe’s car industry, as it comes to terms with the transition toward electric vehicle (EV)-making, while simultaneously coming up against technologically advanced and highly competitive Chinese EVs. 

The stakes could not be higher. The failure to adapt to emerging trends could threaten not only the region’s prosperity but also its democracies and social cohesion.

The former communist bloc’s car-making competency comes from a marriage of convenience between its indigenous engineering know-how, and the region’s gradual integration with Western European markets, broadly regarded as the German-Central Eastern European industrial cluster.

Take Slovakia. Today the country is the world’s leader in cars made per capita, boasting four leading original equipment manufacturers (OEMs) — including Volkswagen AG, KIA, Stellantis and Jaguar Land Rover, with Volvo incoming. 

Car-making accounts for 46.5% of the total sales in the industry, and 41.4% of exports, according to the country’s Association for Automotive Industry. 

OEMs employ more than 170,000 people directly, a number that reaches 255,000 when counting a dense network of almost 400 local suppliers.

Car-making has, moreover, enabled the region to close the prosperity gap with its western neighbours, with the European Commission estimating its purchasing power standard-adjusted GDP per head multiplying manifold since the mid-nineties.

Now the region is staring down the prospect of another profound economic transition, as the quest for car electrification intensifies, the EU gets serious about promoting home-grown production, and Chinese EV brands usurp growing shares of sales in Europe.

OEMs present in Central Europe have forged their paths toward