Eastern Europe: Economic risk – the car industry

In terms of volume, Eastern European countries are not among the world’s largest car-making countries. The value of the car-making industry for Eastern Europe first becomes clear when considered as a share of respective national economic output. In Hungary and Slovakia, the importance of the car industry is roughly comparable with the sector’s weighting for Germany. In the Czech Republic, it is even higher. Moreover, the sector will become even more important in the future, precisely because German carmakers wish to expand their commitment in Eastern Europe.

This comparatively high significance of the car industry for the economy of Eastern European countries is also reflected in their export statistics. The export of vehicles and automotive parts constitutes a large slice of their total exports. This results in a dependency on the car industry that can certainly be regarded as a risk for the economy. If it begins to wobble, it can swiftly put the brakes on economic growth.

The key cause of concern at present is above all the customs tariffs Donald Trump threatens to impose on cars imported from the EU. The threat of tariffs still hovers over the European cars industry like a dark cloud. The decision on whether American customs on imported cars are actually to be introduced was simply deferred by 180 days in mid-May. Should they become a reality, this would also be a severe blow to the Eastern European car industry. The significance of the US market for direct exports in the automobile sector is not overly high from the viewpoint of Eastern European countries, with the exception of Slovakia. Yet its close links with the German economy and its car industry may well be a possible gateway for economic setbacks in future.

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