Polish on cars

By bne IntelliNews March 26, 2010

Jan Cienski in Warsaw -

Poland's economy bucked the general European trend and didn't fall into recession last year, and its car industry also had an unexpectedly strong 2009, followed by an even better early 2010.

For the first two months of this year, Polish car factories produced 142,000 cars, a 20% increase over the same period a year earlier. For the whole of 2009, Polish factories churned out 833,000 cars, only a tiny fall from the record-breaking level of 864,000 reached in 2008.

The main reasons for the decent performance in 2009 was because Poland's largest car factory, the Fiat plant in Tychy in the south of the country, produces small cars like the Fiat 500, which were enormously popular for cash-strapped buyers in the rest of the continent. The 104,000 cars that the Tychy factory has made so far this year account for almost three-quarters of Poland's production.

Fiat, with its small and cheap cars, did particularly well out of the car scrapping subsidy programmes introduced in Germany and other Western European countries as a measure to ameliorate the worst effects of the recession. So the question hanging over Polish car factories is, what will happen as the subsidy programmes expire?

Some analysts feel that the subsidies skewed the car market by pushing forward sales, which will drop sharply when people are no longer rewarded for taking clunkers off the road. However, others think that the stuttering recovery in the Eurozone should make up for the ending of the programmes. "At the moment we can be happy, but there are a lot of questions about the end of the year," says Wojciech Drzewiecki, whose Samar company analyses Poland's car market.

The Fiat plant, which actually increased hiring during the downturn, is still making the 500 and the Ford Ka, both of which should continue to enjoy decent sales, says Drzewiecki.

Opel fruits

The other mainstay of the Polish car sector will be Opel's Gliwice factory, which is one of the most efficient ones owned by the ailing GM subsidiary. While Opel is firing off more than 8,300 workers across Europe and shutting its Belgian factory as it struggles back to its legs, there are no layoffs planned for Poland.

The factory has started making Opel's new Astra IV model, and its production in the first two months of the year was 22,000 cars, 61% more than the same period a year earlier. "Opel's new model puts us in a good position," says Drzewiecki. "That means that Gliwice will make up any possible drops in production in Tychy."

Volkswagen, with a factory near the central Polish city of Poznan, made 11,000 cars, up by 7.7% over a year earlier. The German carmaker had a difficult 2009, recording a 20% production fall, according to Jens Ocksen, the head of the Poznan plant. The main reason was that the factory's more expensive cars had difficulty selling during the crisis, as did the delivery vans that are also an important part of Polish production.

The most troubled of Poland's four carmakers is FSO, owned by Ukraine's Avtozaz and closely tied to that crisis-ridden market. So far this year, FSO's outdated Warsaw car plant saw its production fall by 66% to only 4,800 cars.

The revival in the car market is also benefiting Poland's large car parts sector, which produces not just for local factories, but also for car plants in Germany, Slovakia and the Czech Republic.

Leszek Waliszewski, the owner of FA Krosno, a car parts maker in eastern Poland, says that he is beginning to hire back some staff after laying off a third of his 270 workers last year in order to survive the crisis. "In 2009, our production fell by 21%, mainly because car makers were running down their inventories," he says. "We quickly reduced our costs, and now we are at the size needed for the sales we'll have for the foreseeable future."

Poland's strong car sector, coupled with the more positive impression of the country following its unexpectedly strong 1.7% economic expansion last year, are attracting new investments from car parts makers, says PAIiIZ, the government foreign investment agency.

"Motor companies are shifting their production to more attractive places. That's why, paradoxically, the economic crisis may have positive consequences for us," Piotr Wojaczek of the special economic zone near the industrial city of Katowice told the Rzeczpospolita newspaper.

Related Articles

UK demands for EU reform provoke fury in Visegrad

bne IntelliNews - The Visegrad states raised a chorus of objection on November 10 as the UK prime minister demanded his country's welfare system be allowed to discriminate between EU citizens. The ... more

Poland's Law and Justice nominates hardline cabinet

Wojciech Kość in Warsaw -   Poland’s Law and Justice (PiS) party, which won an outright majority in the parliamentary elections on October 25, has announced a hardline ... more

Kaczynski expected to appoint hardline cabinet

Wojciech Kość in Warsaw -   The Law and Justice (PiS) party, which won an outright ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss