Automotive News - Guide to Economic Development - Supplement - GED11

MACEDONIA

Macedonia wins by
investing in itself

M

BMW

Hamburg Mayor Olaf Scholz (left)
and BMW management board
member Peter Schwarzenbauer
sealed a deal to expand the city's
electromobility network.

GERMANY

In Germany, auto still the powerhouse

T

he next generation of automotive
development is well underway
in Germany.
In less than one week this spring,
BMW Group and the city of Hamburg
announced a landmark electromobility
strategic partnership to stimulate
advance mobility. Mercedes-Benz said its
plant in Rastatt would be its production
hub for compact models from its EQ
electric vehicle sub-brand, and Honda
said it had opened Europe's most
advanced public electric vehicle charging
station at its r&d center in Offenbach.
In addition, China's Beijing WKW
Automotive Parts Co. said this year that
it will invest as much as 1.13 billion
euros ($1.24 billion) in an electric car
factory in Rothenburg/Oberlausitz,
near Germany's border with Poland.
The proposed plant would create more
than 1,000 new jobs. WKW hopes to
benefit from a Made in Germany label
in marketing technologically advanced
cars, Ministry spokesman Marco Henkel
recently told Reuters.
Automakers have spent billions
investing in the country over the past

few years, says Peter Fuss, senior partner
and automotive specialist in Ernst &
Young's German practice.
"Why? Because we have skilled
people, a great environment and we
also have a very stable country," Fuss
says. "You need to have stability in your
global value chain."
Fuss believes that collaboration
between the auto industry and
Germany's politicians is growing as the
industry's challenges increase.
"They understand that neither side
can do it alone," he says. But more will
need to be done to enhance the German
business landscape.
"The changes need to happen even
faster to defend against the growing
number of rivals that are looking to
create a place for themselves in the
future mobility sector," he says.
There is a lot at stake. Germany has
850,857 people directly employed
in automotive manufacturing, or
2.2 percent of the country's active
workforce, according to European
industry association ACEA.
-douglas a. bolduc

acedonia's highway infrastructure is
currently undergoing an 800 million
euro ($900 million) upgrade that will
add 106 miles of new road. The massive
improvement project probably wouldn't
be happening if not for the republic's
decade-long transformation into a go-to
location for automotive suppliers.
Since 2007, parts makers such as
Delphi, Adient, Lear, Johnson Matthey,
Kostal, Kemet and Key Safety Systems
have opened factories in Macedonia.
The country, formerly part of Yugoslavia
and roughly the size of Vermont, also is
currently negotiating with more than 15
existing and new suppliers about future
investments, according to Viktor Mizo,
CEO of Macedonia's Directorate
for Technological Industrial
Development Zones.
Auto components accounted for nearly
half of Macedonia's 4.3 billion euros in
exports last year. Macedonia has lured
suppliers with its availability of skilled,
affordable workforce, its proximity to key
European markets and tax incentives.
Those perks include a 10 percent
corporate and personal income tax, which
is among the lowest in Europe, and a 0
percent tax for both reinvested earnings
and for companies that open a factory
in one of Macedonia's technological
industrial development zones.
To help expedite business in the
country, Macedonian officials promise
that a company can move from business
registration to the start of operations
in just four hours, with only three steps
necessary to obtain a construction
permit, down from 21 previously.
The efforts have gained notice around
the world. In 2006, the World Bank's
annual Ease of Doing Business ranking
counted Macedonia 94th out of 175
economies for its business climate. This
year, it has risen to 10th out of 190.
-douglas a. bolduc

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