Report: Is it time to step up a gear?
The current standing and dominating mindset of the automotive sector in Poland
Survey "Is it time to step up a gear?" describes the current standing and dominating mindset of the automotive sector in Poland. The main trend involves stabilization of both business operations and employment. The survey respondents indicated that measures stimulating demand for passenger cars in Poland would contribute to improved employment, investment and, in consequence, an increase in state budget proceeds. As many as 65% of respondents indicated that the existing tax system was poor or restricted further market development.
We asked the entrepreneurs to assess the possibility of changes in the automotive sector. As many as 74% of them expect broadly defined ownership changes in the industry. At the same time, 38% percent indicate that changes would not impact their firm or other entities from the capital group.
Selected survey conclusions
Survey respondents positively evaluated last year's performance of the industry
The survey respondents positively assessed the performance for the last 12 months, which is related to a growing number of orders on the European market.
Optimistic sales projections for the coming six months
Over 50% of respondents expect that within the next 6 months sales markets will grow and revenue will increase. Obviously, the unstable euro gives rise to doubts regarding longer investment horizons.
Investments will grow, although slower than in the previous year
65% of all respondents predict that 2012 will be a year of investment in companies. According to one-third of them, investments in the coming year are highly probable. Compared to the 2010 survey, there is a 14 pp. decrease (47% last year vs. 33% at present).
EU subsidies being a significant source of industry funding
55% of respondents applied for funding, out of which 43% obtained it. As many as 29% of respondents stated that they had not even tried to apply for aid. Easier access to investment incentives would probably stimulate further development of the automotive sector in Poland.
Conservative employment plans
As in previous year, the results concerning planned increase in the employment level are moderately optimistic, however, it needs to be remembered that part of employees in the automotive market are temporary. Therefore, the statistics may be less optimistic if limited to permanent employment.
Consumption spends will remain flat
Entrepreneurs have maintained the “cost cut” policy, which in combination with planned investments does not allow for a significant increase in the consumer expenditure.
Global demand for electric vehicles will not impact the production level in Poland. Not at the moment.
According to 53% of respondents, this will not impact their business operations. At present, no production changes are planned, but the situation may change in the coming years.
Progressing market concentration is a permanent feature of the automotive industry
According to 74% of respondents, the industry will see ownership changes. Nearly one-third predict the changes to occur in the structure of foreign concerns they have worked for, or even in their Polish branches. Firms interested in becoming global players may flexibly respond to market changes, which may necessitate more business concentration. A similar trend, involving takeover of renowned brands by concerns, is visible in the supply sector as well.