Supplying the big guys
In 1995, foreign auto makers pledged $2.7 billion in investment for Polish auto plants.
For every $400 that a car producer, like Fiat, makes on a car sale, the parts suppliers also make $360, said Andrzej Kublik, research director at Business Management & Finance, advisers to the Industry Ministry.
Because of this, "everybody is here. The Polish market is becoming much more diverse," said Graham Bell, director of European marketing for Delphi Automotive Systems.
Global original equipment manufacturers (OEM), companies that produce components and systems directly for auto manufacturers, have landed on the Polish market. These often turn to Polish firms for parts because of their low labor costs.
Given the investment in the auto industry here, Industry and Trade Minister Klemens Scierski has called the auto parts market a "high opportunity sector for investors." These investors have agreed with his assessment, pumping $500 million into Polish parts producers since 1992.
Fiat has a 51% share of the Polish car market and is the largest single buyer of Polish produced parts. The company has just announced plans to invest an additional $1.1 billion in Fiat Auto Poland and increase car production by 20% to 300,000 units. About 70% of parts are sourced locally with parts and services coming from 270 Polish companies and 170 foreign firms. And its foreign suppliers are buying up Polish companies to take advantage of labor costs that are lower than those in Western Europe.
The Teksid company, a longtime supplier of aluminum molds to Fiat, invested $21 million in 1992 in the Skoczow plant in Bielsko-Biala. U.S.-based Allied Signal invested $10 million in a Fabryka Samochodow Malolitrazowych (FSM) plant in Twardogora, which was a local supplier of braking systems to Fiat.
Daewoo, with its $1 billion investment in Fabryka Samochodow Osobowych (FSO) and aspirations of making 600,000 cars a year, kept FSO's parts suppliers when the auto makers formed a joint venture late last year. FSO historically produced 60% of its parts among its 29 parts divisions for production of its Polonez cars. Under the provisions of Daewoo's purchasing agreement with the Polish government, the Koreans plan to localize 80% of parts for production.
General Motors, set to build a $337 million greenfield plant in southern Poland, wants to purchase $1 billion in components in Eastern Europe. The bulk would come from Poland.
For every $400 that a car producer, like Fiat, makes on a car sale, the parts suppliers also make $360, said Andrzej Kublik, research director at Business Management & Finance, advisers to the Industry Ministry.
Because of this, "everybody is here. The Polish market is becoming much more diverse," said Graham Bell, director of European marketing for Delphi Automotive Systems.
Global original equipment manufacturers (OEM), companies that produce components and systems directly for auto manufacturers, have landed on the Polish market. These often turn to Polish firms for parts because of their low labor costs.
Given the investment in the auto industry here, Industry and Trade Minister Klemens Scierski has called the auto parts market a "high opportunity sector for investors." These investors have agreed with his assessment, pumping $500 million into Polish parts producers since 1992.
Fiat has a 51% share of the Polish car market and is the largest single buyer of Polish produced parts. The company has just announced plans to invest an additional $1.1 billion in Fiat Auto Poland and increase car production by 20% to 300,000 units. About 70% of parts are sourced locally with parts and services coming from 270 Polish companies and 170 foreign firms. And its foreign suppliers are buying up Polish companies to take advantage of labor costs that are lower than those in Western Europe.
The Teksid company, a longtime supplier of aluminum molds to Fiat, invested $21 million in 1992 in the Skoczow plant in Bielsko-Biala. U.S.-based Allied Signal invested $10 million in a Fabryka Samochodow Malolitrazowych (FSM) plant in Twardogora, which was a local supplier of braking systems to Fiat.
Daewoo, with its $1 billion investment in Fabryka Samochodow Osobowych (FSO) and aspirations of making 600,000 cars a year, kept FSO's parts suppliers when the auto makers formed a joint venture late last year. FSO historically produced 60% of its parts among its 29 parts divisions for production of its Polonez cars. Under the provisions of Daewoo's purchasing agreement with the Polish government, the Koreans plan to localize 80% of parts for production.
General Motors, set to build a $337 million greenfield plant in southern Poland, wants to purchase $1 billion in components in Eastern Europe. The bulk would come from Poland.
