Skip to main navigation menu Skip to main content Skip to site footer

Covid-19 and transformational megatrends in the European automotive industry: Evidence from business decisions with a Central and Eastern European focus

DOI:

https://doi.org/10.15678/EBER.2021.090402

Abstract

Objective: The objective of the article is to reveal the effects of the Covid-19 pandemic on the businesses in the European automotive sector, with a special focus on Central and Eastern Europe. The further objective is to identify how these effects relate to the ongoing transformational megatrends in the sector (digitalisation, electrification).

Research Design & Methods: We have collected a large (>700 items) sample of relevant business decisions in the European automotive sector over four years (2017-2021), including those taken especially due to the Covid-19 pandemic. In our research, we transformed our qualitative inputs into a quantitatively analysable database through coding. Then, we applied descriptive statistical analysis on the retrieved data combined with qualitative analysis of the contents behind these data.

Findings: Based on our sample, our primary finding is that the Covid-19 pandemic does trigger the already existing trends of digitalisation and electrification in the European automotive sector. Very similar effects characterise the relatively less developed but deeply integrated Central and Eastern European periphery, although to a lesser extent. Obviously, the Covid-19 pandemic has induced numerous temporary business decisions, mainly plant closures. Layoffs occurred as well but these were not prevalent. Then, the second wave of the pandemic in early 2021 brought about the global shortage of semiconductor chips, which substantially affected the sector in Europe.

Implications & Recommendations: The longer lasting impact of the short-term pandemic-related European automotive business decisions is yet to be explored. Nevertheless, the global shortage of semiconductor chips is already showing signs of influencing the industry over a longer time scale, in Europe as well. Forward-looking, future-oriented, and brave responses to the pandemic can well be the keys for businesses to successfully overcome the negative effects of the Covid-19 pandemic.

Contribution & Value Added: Our sample of more than 700 items and a four-year-long timespan is in itself a unique collection of business decisions in the European automotive sector. In addition, by processing the inputs through coding, our sample becomes a treasury of potential information. In this article, we conduct an exploration along the events to which the decisions can be related, and along the decision types. We also look at the involvement of Central and Eastern Europe. Obviously, our ongoing primary research was ready to be extended to the firm level analysis of the effects of the Covid-19 pandemic, immediately upon its outburst.

       

Keywords

COVID-19, automotive industry, Central and Eastern Europe, digitalisation, electrification

(PDF) Save

Author Biography

Anita Pelle

Associate Professor at the University of Szeged. She holds a PhD in Economics (2010). She received a postdoctoral scholarship from the National Centre of Excellence of Hungary in 2013-2014 and has held a Jean Monnet Chair since 2014. She teaches on and studies the economy of the EU, the European economic integration process, the history of European economic thought, the EU internal market and its regulation, and lately, the internal EU divide. She has also been visiting professor at Université d’Angers (France), Université Jean Moulin Lyon III (France), Universitá di Pavia (Italy), Vysoká Škola Ekonomická v Praze (Czech Republic), Universitá di Macerata (Italy), and Uniwersytet Warszawski (Poland).

Gabriella Tabajdi

PhD Student and junior researcher at the Faculty of Economics and Business Administration of the University of Szeged. She holds an MSc in International Economy and Business (University of Szeged) and an MSc in International Business and Entrepreneurship (Universitá di Pavia). Her research focuses on the process of European integration, the internal market of the European Union, and international business and location decisions.

 


References

  1. ACEA (2018). The Automobile Industry Pocket Guide 2018-2019. Brussels, Belgium: European Automobile Manufacturer Association. Retrieved from https://www.acea.auto/nav/?content=publications&search=%22pocket%20guide%22&orderby=date on January 09, 2021.
  2. ACEA (2020a). Interactive map: Production impact of COVID-19 on the European auto industry. Brussels, Bel-gium: European Automobile Manufacturer Association. Retrieved from https://www.acea.be/news/article/interactive-map-production-impact-of-covid-19-on-the-european-auto-industry on January 09, 2021.
  3. ACEA (2020b). Interactive map: COVID-19 impact on EU automobile production, full-year 2020. Brussels, Bel-gium: European Automobile Manufacturer Association Retrieved from: https://www.acea.be/news/article/interactive-map-covid-19-impact-on-eu-automobile-production-full-year-2020 on January 10, 2021.
  4. Belniak, M. (2015). Factors Stimulating Internationalisation of Firms: An Attempted Holistic Synthesis. Entre-preneurial Business and Economics Review, 3(2), 125-140. https://doi.org/10.15678/EBER.2015.030209
  5. Betti, F., & Hong, K.P. (2020). Coronavirus is disrupting global value chains Here’s how companies can respond. Cologny, Switzerland: World Economic Forum Retrieved from https://www.weforum.org/agenda/2020/02/how-coronavirus-disrupts-global-value-chains/?fbclid=IwAR0d8Xj3zIgi3d-IDh95dEDZliob1B-VgVbyUt2%E2%80%A6 on January, 09 2021.
  6. Böhm, A. (2004). Theoretical Coding: Text Analysis in Grounded Theory. In Flick, U., Kardoff, E., & Steinke, I. (Eds.), A Companion to Qualitative Research, (pp. 270-275). London, UK: SAGE Publications
  7. Casper, R., & Sundin, E. (2020). Electrification in the automotive industry: effects in remanufacturing. Journal of Remanufacturing, Retrieved from https://link.springer.com/article/10.1007/s13243-020-00094-8 on February 07, 2021.
  8. Cieślik, A. (2017). Determinants of MNE Activity in Poland: The Case of Firms from EU-15. Entrepreneurial Business and Economics Review, 5(1), 151-167, https://doi.org/10.15678/EBER.2017.050109
  9. Demertzis, M., & Masllorens, G. (2020). The cost of coronavirus in terms of interrupted global value chains. Bruegel Blog Post, Brussels, Belgium: Bruegel Retrieved from https://www.bruegel.org/2020/03/the-cost-of-coronavirus-in-terms-of-interrupted-global-value-chains/?fbclid=IwAR0lI3f2mt600lcngi-YpEBdVve14n%E2%80%A6 on January, 09 2021.
  10. Dorożyński, T., Dobrowolska, B., & Kuna-Marszałek, A. (2020). Institutional Quality in Central and East Euro-pean Countries and Its Impact on FDI Inflow. Entrepreneurial Business and Economics Review, 8(1), 91-110. https://doi.org/10.15678/EBER.2020.080105
  11. Drahokoupil, J. (2020). Introduction: Digitalisation and automotive production networks in Europe. In Dra-hokoupil, J. (Ed.), The challenge of digital transformation in the automotive industry – Jobs, upgrading and prospects for development (pp. 7-22.). Brussels: ETUI Retrieved from https://www.etui.org/publications/challenge-digital-transformation-automotive-industry on June 1, 2021.
  12. Drelich-Skulska, B., & Bobowski, S. (2021). Intra-industry trade and implications of the European Union-Japan Economic Partnership Agreement from the perspective of the automotive industry. Entrepreneur-ial Business and Economics Review, 9(2), 183-206. https://doi.org/10.15678/EBER.2021.090212
  13. Dutt, D., Natarajan, V., Wilson, A., & Robinson, R. (2020). Steering into Industry 4.0 in the automotive sector. In Kaji, J., Saini, K., Khan, A., Gangopadhyay, N., George, A., Bhat, R., & Devan, P. (Eds.), Industry 4.0 in automotive: Digitizing the end-to-end automotive value chain (pp. 7-10). London UK: Deloitte Insights.
  14. EC (2021). Economic Forecasts and Trends. Brussels, Belgium: European Commission Retrieved from https://ec.europa.eu/info/statistics/economic-forecasts-and-trends_en on March 20, 2021.
  15. Farkas, B. (2011). The Central and Eastern European model of capitalism. Post-Communist Economies, 23(1), 15-34. https://doi.org/10.1080/14631377.2011.546972
  16. Giffi, C.A., Vitale, J., Schiller, T., & Robinson, R. (2020). Who’s going to pay for the future mobility? In Kaji, J., Saini, K., Khan, A., Gangopadhyay, N., George, A., Bhat, R., & Devan, P. (Eds.), Industry 4.0 in automotive: Digitizing the end-to-end automotive value chain (pp. 2-6.). London UK: Deloitte Insights.
  17. Götz, M., Jankowska, B., Matysek-Jędrych, A., & Mroczek-Dąbrowska, K. (2018). Governmental change and FDI inflow to Poland and Hungary in 2010-2016. Entrepreneurial Business and Economics Review, 6(1), 153-173. https://doi.org/10.15678/EBER.2018.060109
  18. Kaszowska-Mojsa, J. (2020). Innovation strategies of manufacturing companies during expansions and slow-downs. Entrepreneurial Business and Economics Review, 8(4), 47-66. https://doi.org/10.15678/EBER.2020.080403
  19. Kinnunen, J., Georgescu, I., Hosseini, Z., & Androniceanu, A.-M. (2021). Dynamic indexing and clustering of government strategies to mitigate Covid-19. Entrepreneurial Business and Economics Review, 9(2), 7-20. https://doi.org/10.15678/EBER.2021.090201
  20. Leering, R., & Spakman, T. (2020). Countries hit most by the coronavirus value chain shock. ING Economic and Financial Analysis, ING, Retrieved from https://think.ing.com/articles/countries-hurt-most-by-covid-19-global-value-chain-shock/ on February 09, 2021.
  21. Linneberg, M. S., & Korsgaard, S. (2019). Coding qualitative data: a synthesis guiding the novice. Qualitative Research Journal, 19(3), 259-270. https://doi.org/10.1108/QRJ-12-2018-0012
  22. Makieła, K., Wojciechowski, L., & Wach, K. (2021). Effectiveness of FDI, technological gap and sectoral level productivity in the Visegrad Group. Technological and Economic Development of Economy, 27(1), 149-174. https://doi.org/10.3846/tede.2020.14017
  23. Molnár, E. (2013). Egy dinamikus iparág foglalkoztatási hatásainak földrajzi aspektusai: a magyarországi autóipar esete, Területi Statisztika, 53(4), 322-339. Retrieved from https://www.ksh.hu/docs/hun/xftp/terstat/2013/04/molnar.pdf on December 15, 2020.
  24. Nölke, A., & Vliegenthart, A. (2009). Enlarging the Varieties of Capitalism: The Emergence of Dependent Market Economies in East Central Europe. World Politics, 61(4), 670-702. https://doi.org/10.1017/S0043887109990098
  25. Pavlínek, P. (2015). Foreign direct investment and the development of the automotive industry in central and eastern Europe. In Galgóczi B., Drahokoupil J., & Bernaciak M. (Eds.), Foreign investment in eastern and southern Europe after 2008 – Still a lever of growth? (pp. 209-255). Brussels, Belgium: ETUI Retrieved from: https://www.etui.org/sites/default/files/15%20Foreign%20invest%20Galgoczi%20Web%202%20version.pdf on December 22, 2020.
  26. Pavlínek, P., Aláez-Aller, R., Gil-Canaleta, C., & Ullibarri-Arce, M. (2017). Foreign Direct Investment and the development of the automotive industry in Eastern and Southern Europe. ETUI Working Paper No. 2017.03, Brussels, Belgium: European Trade Union Institute Retrieved from https://www.researchgate.net/publication/324665544_Foreign_Direct_Investment_and_the_Development_of_the_Automotive_Industry_in_Eastern_and_Southern_Europe on December 20, 2020.
  27. Pavlínek, P., & Guzik, R. (2009). Industrial Upgrading through Foreign Direct Investment in Cen-tral European Automotive Manufacturing. European Urban and Regional Studies, 16(1), 46-63. https://doi.org/10.1177/0969776408098932
  28. Rechnitzer, J., Hausmann, R., & Tóth, T. (2017). Insight into the Hungarian Automotive Industry in Interna-tional Comparison. Financial and Economic Review, 16(1), 119-142. Retrieved from https://econpapers.repec.org/RePEc:mnb:finrev:v:16:y:2017:i:1:p:119-142 on December 15, 2020.
  29. Ricci, A. (2019). Is There Social or Monetary Dumping in the European Union? Manufacturing Competitive-ness in Central and Eastern Europe. Entrepreneurial Business and Economics Review, 7(1), 159-180. https://doi.org/10.15678/EBER.2019.070109
  30. Saldaña, J. (2009). The coding manual for qualitative researchers. London, UK: SAGE Publications
  31. Saldaña, J. (2015). The coding manual for qualitative researchers 3rd ed. Thousand Oaks, CA: Sage
  32. Simonazzi, A., Sanginés, J. C., & Russo, M. (2020). The Future of the Automotive Industry: Dangerous Challeng-es or New Life for a Saturated Market? Intereconomics Working Paper No. 141, Intereconomics Institute for New Economic Thinking
  33. UNCTAD (2020a). Global trade impact of the coronavirus (COVID-19) epidemic. UNCTAD Trade and Devel-opment Report, No. UNCTAD/DITC/INF/2020/1. Geneva, Switzerland: United Nations Conference on Trade and Development Retrieved from: https://unctad.org/system/files/official-document/ditcinf2020d1.pdf on February 10, 2021.
  34. UNCTAD (2020b). Impact of the Coronavirus Outbreak on Global FDI. UNCTAD Investment Trends Monitor Special Issue March 2020. Geneva, Switzerland: United Nations Conference on Trade and Development Retrieved from: https://unctad.org/system/files/information-document/diae_gitm34_coronavirus_8march2020.pdf on February 10, 2021.
  35. Urbach, N., & Röglinger, M. (2018). Introduction to Digitalization Cases: How Organization Rethink Their Business for the Digital Age. In Urbach, N., & Röglinger, M. (Eds.), Digitalization Cases: How Organization Rethink Their Business for the Digital Age (pp. 1-12). Cham, Switzerland: Springer International Publish-ing.
  36. Vosta, M., & Kocourek, A. (2016). Competitiveness of the European Automobile Industry in the Global Con-text.Politics in Central Europe, 13(1), 69-86. https://doi.org/10.1515/pce-2016-0023
  37. Żak, M., & Garncarz, J. (2020). Economic policy towards the challenges of the COVID-19 pandemic in selected European Union countries. International Entrepreneurship Review, 6(4), 21-34. https://doi.org/10.15678/IER.2020.0604.02

Downloads

Download data is not yet available.