Study shows urgent need for action in funding policy and measures to make the location attractive
Vienna (OTS) –
- Austria’s automotive supply industry generates sales of 28.5 billion and secures around 81,000 direct and 200,000 jobs indirectly
- Disruptive changes and structural change are putting the entire automotive industry across Europe under pressure
- Third countries outside the European Union can make better use of locational advantages and benefit from them
- High pressure to act to keep the supplier industry in Austria competitive
- Better funding regimes and lower wage and energy costs are the most important levers
The automotive supply industry is one of the strongest industrial sectors in Austria, with sales of around 28.5 billion euros. The central success factor is their international competitiveness. A current study by the Industrial Science Institute (IWI), carried out on behalf of the ARGE Automotive Supplier Industry, shows how urgent the need for action is in Austria. “The supply industry is one of Austria’s key industrial sectors. Like the entire automotive industry worldwide, it is currently undergoing profound technological and organizational change. This involves the basic business models as well as new value chains and products. The close networking of Austrian companies with the final assemblies of the European automotive industry plays a crucial role,” says Dietmar Schäfer, Chairman of the ARGE Automotive Supplier Industry.
The most important drivers for change in the industry are digitalization and automation, individualization and, crucially, decarbonization with the gradual reduction of traditional combustion engines, primarily driven by the European climate goals (Green Deal). The politically desired switch to electromobility has a profound impact on production processes, engineering and design of central vehicle elements and thus has a dramatic impact on the future of the industry. For example, a combustion engine is made up of around 2,000 moving parts, while an electric motor only consists of around 20 parts.
Study author Herwig Schneider, head of the IWI: “The conversion of individual mobility to electromobility will also change the overall structure of the industry in the long term. In addition to managing the transformation, it is also important to compete with other countries. Our analysis shows that third countries in Asia and North and South America in particular were able to significantly strengthen their position. But there are also some countries within Europe where suppliers find better conditions. “It is important, on the one hand, to prevent Austrian companies from having to relocate production and, on the other hand, to improve the framework conditions so that companies invest in the country and thus innovation and added value do not flow away.”
The study analyzes location advantages and disadvantages based on expert assessments from direct competitor countries and highlights Austria’s systemic weaknesses. For decades, the country was considered a pioneer in RTI and labor market qualifications as well as in environmental technologies. Meanwhile, other countries with specific funding programs have significantly improved their position in these areas. Competitors such as China and the USA have recently intensified their funding regimes – the USA, for example, as part of the Inflation Reduction Act – to which the European Union has not yet found an adequate answer.
Dietmar Schäfer: “In order to strengthen the transformation of the automotive supply industry, two approaches are required. A specific funding regime should be developed immediately, for example for the research and development of battery technologies and innovative components. And indirectly it is about the general levers that have already been widely called for to strengthen the industrial location: significant reduction in non-wage labor costs, reduction in energy costs, de-bureaucratization and combating the shortage of skilled workers. Only then will Austria’s supplier industry have a future. The political actors involved must take responsibility again, otherwise we will sustainably destroy the European and thus also the Austrian business location.”
Further information, a short presentation and the entire study “International comparison of locations in the automotive industry” can be downloaded at: https://www.arge-auto.at/publikationen/
About ARGE Automotive
The ARGE Automotive Supplier Industry is the Austria-wide industry representative for the around 900 companies from the automotive value creation sector represented in the WKO and thus brings together all the key players in this sector under one roof. The supporting organizations are the WKO, represented by the Federal Industry Division, and the AWO/Foreign Trade Austria as well as six industry trade associations (FV-NE-Metall, FV Bergwerke & Stahl, FV Metalltechnike Industrie, FV Chemical Industrie, FV Elektro- und Elektronikindustrie and FV Textil -, clothing, shoe and leather industries), which include automotive suppliers among its members. The primary goal is to create an improved public perception of automotive suppliers in order to optimize the industrial policy framework. The integration into the WKO also ensures optimal coordination, especially with the vehicle industry association as the manufacturer’s interest group.
Questions & Contact:
ARGE automotive supply industry
Chairman Dipl.Ing. Dietmar Schäfer
GF Clemens Zinkl, MSc
A-1045 Vienna, Wiedner Hauptstraße 63
Phone: +43 (0)5 90 900 3482
Email: auto supplier@fmti.at
www.arge-auto.at
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