Historically dominated by Germany, the European auto electronics market has shifted in the last few years, with Poland running a close second on the manufacturing front. In Poland Emerging as European Hub for Automotive Electronics, Nitin Dahad discusses some of the new innovations being produced by Polish companies.
In 2018, for example, automotive components supplier ZF opened a new facility in Poland, where it is focused on advanced safety electronics for vehicles.
“At CES, ZF revealed that its ProAI technology and control box, developed in conjunction with Nvidia, has progressed from concept to a production-ready system,” Dahad writes. “Poland is increasingly becoming both an automotive and electronics hub, and could easily be the second largest automotive hub in Europe after Germany.”
On track to reach $401.67 billion in sales by the end of 2023—up from $173.06 billion in 2016—the global auto electronics market is growing at a 12.8% clip (CAGR), according to Orbis Research, with the key market drivers being technological advancements in the electronics industry.
Advanced Driver Assistance Systems (ADAS), for example, are dominating the market thanks to the “government mandatory deployment terms coupled with growing acceptance of active safety systems in vehicles,” Orbis reports, noting that the Asia Pacific market is expected to dominate the trend in the forthcoming years due to vehicle customization, superior product quality, and low cost.
“Moreover,” the research firm continues, “North America and Europe are proliferating demand for customer comfort and safety which is driving market in [those areas].”
Activity Ramps Up
The Polish Investment and Trade Agency reports that out of 40 car and engine plants located in Central Eastern Europe (CEE), 16 are based in the country. With vehicles, parts, and accessories sales, this accounted for about 11 percent of the country’s total exports in 2013. Almost 80 percent of Polish automotive exports is directed to the EU markets, Dahad notes, “with major OEMs there including VW, GM, Nissan, Fiat, and Scania.”
Last year saw a number of large manufacturers taking a bigger interest in Poland. Responding to growing demand for safety electronics in the automotive environment, for example, ZF Global Electronics’ new plant in Czestochowa is expected to support all active and passive safety technology product lines, including innovative camera generations for active safety and airbag control units for passenger protection systems. The new plant is scheduled to launch production by the end of 2019; at full capacity, the plant will employ more than 300 workers.
Calling Poland a “top FDI destination” (foreign direct investment), Euronews recently revealed that the country would soon be home to Europe’s largest lithium-ion battery factory.
LG Chem plans to spend $1.63 billion on the factory, which will be situated in Kobierzyce, where it expects to produce up to 100,000 EV batteries in Poland annually. The facility will help fill growing demand for electric vehicle (EV) components —a sector whose value is expected to top $240 billion in the next two decades, Euronews reports.
Auto manufacturers have also taken an interest in Poland. In November, Toyota Motor Corp., announced that it would invest $113 million in a new combustion engine manufacturing plant (for hybrid vehicles) there. According to a Reuters report, Toyota will start production of the new-generation 1.5 liter-engine from 2020 in its factory in Jelcz-Laskowice. The auto manufacturer already has two manufacturing plants in Poland’s Lower Silesia region.
Based on the already-strong momentum from companies that are considering Poland for their next automotive electronics factories, expect to see even more of these announcements in 2018.
“Poland has built a reputation as a regional production hub for automotive parts and accessories, counting GM/Opel, Volvo, Fiat, and Volkswagen among its veteran investors,” Euronews reports. “Free access to the 500 million-strong European market, and an educated local workforce, are just two benefits that have drawn businesses across many sectors to the Central European country.”