Due to the deteriorating conditions in the European car market, this sector, which accounts for 8% of the GDP, heavily depends on foreign orders.
According to data from Statistics Poland (GUS), production of motor vehicles, trailers, and semi-trailers dropped by 1.8% from February to March and by 4.7% compared to March last year.
Passenger car production saw a more dramatic decline, with a one-third decrease from the previous year, despite a 10% increase in the first quarter.
The AutomotiveSuppliers.pl website, which deals with events and investments in the automotive industry in Poland and Europe, said that 2024 could mark the first time in several years that lower production and export values were seen compared to the previous year.
Rafał Orłowski, partner at AutomotiveSuppliers.pl, highlighted that overall employment in the automotive sector might also decline, despite new jobs in the emerging electromobility sector.
He said: “We are already observing a deterioration in the financial condition of suppliers, as evidenced by numerous bankruptcies among companies in Germany.”
Record numbers
Last year, the industry achieved unprecedented success, setting new records in production and exports. It generated a remarkable 236.5 billion zlotys (approximately €55.55 billion) in sales and surpassed €50 billion in export value.
Moreover, employment in the industry grew by nearly 3%, although the rate of increase varied as the year progressed.
The industry employs 200,000 workers in vehicle and component manufacturing, which constitutes over 7% of the total industrial workforce. Additionally, another 300,000 work in related sectors.
Manufacturing companies exit Poland
The closure of production in companies like Scania Production Słupsk and Volvo Buses in Wrocław negatively impacted the market.
The Słupsk factory ceased bus body construction, focusing only on chassis production, while Volvo completely exited Wrocław. Moreover, MAN in Starachowice significantly reduced its workforce due to declining orders.
Decline in Europe
The overall mood in Europe’s automotive industry is worsening, with the European Automobile Manufacturers’ Association (ACEA) reporting a 5% decline in demand for new cars in March.
This drop follows consistent increases throughout last year and the first two months of this year.
A survey conducted by CLEPA and McKinsey & Company reveals that 25% of European manufacturers expect to operate at marginal or negative profit levels, whereas 37% anticipate profitability exceeding 5%.
Despite nearly half of the respondents projecting revenue growth in 2024, about 31% predict a decline.
Electric vehicle sales in the EU fell for the first time since April 2020, decreasing by 11.3% year-over-year in March.
The share of electric vehicles in the market dropped from 13.9% to 13%. Although overall sales increased by 3.8% in the first quarter, the market grew faster at 4.4%, reversing previous trends.
Ola Källenius, CEO of Mercedes, commented on the industry’s transformation, referring to the shift to battery-powered vehicles: “The transition may take longer than expected.”
