CEE automotive industry: Accelerating challenges

Although some countries in the CEE region have introduced car subsidies (even before the Covid-19 outbreak), what matters more for the region, which exports a large part of its auto production, is the recent EU/German scrappage scheme. But given its focus on electric cars subsidies, it will provide only limited help to the CEE automotive sector, as electric cars are only gradually being produced there. Benefits to the region coming from potential supply chain disruptions seem less clear and we do not see any strong evidence for that just yet. As such, the Covid-19 crisis might accelerate challenges for the sector, which were already apparent before the coronavirus outbreak.