First Mover Expansion A Sign Of Things To Come

BMI View : Bulgaria is well positioned to increase its regional competitiveness as an autos production hub in Central and Eastern Europe. Recent investment from Litex Motors, highlights the growing opportunities for autos manufacturers, backed up by continued investment from key international suppliers of parts and accessories.

In line with BMI's favourable view of the growth potential of Bulgaria's autos manufacturing sector over our five-year forecast period, Litex Motors, the Bulgarian subsidiary of China's Great Wall Motors, has announced an added EUR70mn investment in its Lovech factory; the only vehicle assembly plant in Bulgaria. The move will allow Litex Motors to incorporate welding, metal working and painting processes into its operations, which are currently focused on assembly of kits manufactured in China. The plant has an annual production capacity of 50,000 units.

The move is the first of its kind in Bulgaria and indicates the country's potential for conducting more value-adding processes domestically rather than just assembly tasks. As a result, BMI is closely monitoring the performance of Litex Motors. If successful, it could prove to be a bellwether for larger manufacturers looking for a new production base strategically located near to major regional markets and a good supplier network. Indeed, Bulgaria's cheaper labour costs, close proximity to major markets, EU membership and low taxes have allowed exporters to increase their competitiveness as is evident in the 52% growth in the value of passenger vehicle (PV) and commercial vehicle (CV) exports in 2013.

Bulgaria's Growing Export Competitiveness
Bulgaria's Export Values (millions of US$), 2009-2013

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This article is tagged to:
Related sectors of this article: Autos, Exports, Production - Autos, Passenger Vehicles, Suppliers
Geography: Bulgaria

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