Description

The automotive sector in Central and Eastern Europe (CEE) has experienced unprecedented expansion during much of the last decade, enjoying the benefits
of both growth and investment. Without doubt, the global financial and economic downturn, which has unfolded during the past six months, will have a major
impact on the region. The significant decline in consumer demand for automobiles is causing manufacturers to scale back production with a corresponding effect on the supply chain.

Manufacturers and suppliers have already announced job reduction programs in the region and it is likely that this will continue throughout much of 2009. However, CEE's reputation as a cost-effective and productive manufacturing location means that the medium-term outlook is broadly positive and the issue of value remains forefront in the minds of the region's automotive executives.

Considering the current environment, executives are no doubt focused on preserving the value they have created over many years during an era of significant change in one of the world's most dynamic regions. This requires many tasks, for example conserving and maintaining cash while simultaneously retaining highly skilled human resources. It also mandates the ability to identify and manage numerous risks, often originating outside the regions’ borders, yet landing squarely on the door step of local economies with frightening speed.

A report of: KPMG IN CENTRAL & EASTERN EUROPE