Three CEE countries compete for €200mn Mitsubishi engine plant

Three CEE countries compete for €200mn Mitsubishi engine plant
By bne IntelliNews March 4, 2017

Hungary, Romania and Slovakia are reportedly competing to host Japanese car maker Mitsubishi’s planned engine plant, an investment estimated at more than €200mm.

Reports suggest the carmaker is hoping to spark competition across the region. Last year, several CEE countries vied for a €500mn investment from German car producer Daimler, with Romania eventually losing out to Poland because of its weak infrastructure. 

Representatives of the Japanese company met Romanian government officials on March 1 to ask what the Southeast European country would offer if they decided to pick Romania to host the new factory, government sources told stirileprotv.ro.

Mitsubishi is reportedly considering two locations in Romania for the engine plant. The carmaker is considering the western county of Timis and the southern county of Prahova. Both possible locations are near motorways, which would allow Mitsubishi to transport its engines to Western Europe.

Romania hosts car plants owned by Renault and Ford and many car parts producers. Slovakia, which is the largest car producer per capita in Europe, is home to three large car assembly plants, run by Germany’s Volkswagen, France’s PSA Peugeot-Citroen and South Korea’s Kia Motors. Jaguar Land Rover announced in August 2015 that it will place a £1bn (€1.2bn) plant in Slovakia. Hungary hosts plants operated by Daimler, Opel, Suzuki and Audi.

Although Hungary and Slovakia might look more attractive in terms of infrastructure and location, Romania may benefit from the existing collaboration between Mitsubishi and the Renault-Nissan group. Mitsubishi was bought last year by the French-Japanese group and Renault’s experience with the Romanian Dacia plant, which it acquired in 1999, might be an important factor in making the decision. However, negotiations will also cover benefits and tax exemptions.

Net inflows of FDI to Romania increased to €3.87bn in 2016 from €2.96bn in 2015 and €2.70bn in 2014. This was the best performance since 2008 (when net FDI was €9bn). 

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