Warsaw has signed off on a deal that will see German carmaker Daimler build a €500mn factory in south-western Poland, the prime minister announced on October 13. Meanwhile, the government claimed that it expects further large automotive investments to arrive.

The signing with Daimler is the final confirmation of the announcement earlier this year that the German maker of the Mercedes marque had selected Poland as a host for a new engine factory. The company spent early 2016 parading its favours around CEE in an apparent bid to leverage favourable investment conditions.

Prime Minister Beata Szydlo said the Daimler factory fits her government's targets of “rebuilding industry and creation of jobs in [sectors] producing the most modern equipment.”

Poland and other CEE countries remain an attractive region for automakers, which have come to rely on the region's skilled labour offer at competitive costs. However, with labour markets tightening, there is now strong concern that a shortage of candidates and raised costs could hold new investment back.

Yet Poland is counting on more than one other large automotive investment that will create several hundred new jobs, Deputy Prime Minister Mateusz Morawiecki said following the signing. The man that was recently handed the keys to the entire economic sphere said Poland is in talks with Japanese giant Toyota, as well as an unnamed investor from the US. Media reports claimed earlier this month that Toyota is set to announce it will build an automatic transmission factory in Walbrzych.

The Daimler factory should launch production in 2019 and reach full capacity the following year. It will produce a “few hundred thousand” engines for the entire range of Mercedes models, the PM's office said.