The increasing presence of original equipment manufacturers in emerging markets is encouraging car parts suppliers to strengthen their position in these areas. Greenfield investment projects recorded by fDi Markets have shown that emerging countries are dominating the 10 top destinations for automotive manufacturers to invest in. China tops the list with 500 FDI initiatives in the automotive sector between 2003 and 2009. The US is the only economically developed country to appear on this list, with a total of 363 investment projects.

In the fast lane

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However, many US-based companies are now investing in these emerging countries. An example of this is Allison Transmission, which is looking to build its automatic transmissions at a new facility in Szentgotthard, Hungary. A major attraction for these suppliers is the low-cost production in emerging regions and links with central and eastern Europe, as well as the Asia-Pacific market. Opportunities for parts makers such as Allison stem from the growing demand for automotive gearboxes in Europe in light of recent environmental and fuel-efficiency regulations, together with advancements in vehicle electronics. In emerging markets, experts believe that much of the potential for automatic transmissions lie in the growth potential of commercial vehicles.

Hungary for growth

Hungary is widely expected to increase in importance to automotive companies, and Germany-based auto giant Audi has recently announced plans to invest €900m at a site adjacent to its Gyor plant in north-west Hungary. As a result, the company will be able to produce 125,000 cars by the end of 2013, with total output expected to reach 1.5 million a year as of 2015. Audi will create 1800 new jobs at the facility, which receives the bodywork of certain Audi models via train from Ingolstadt. It is expected that complete passenger cars will later be produced at the site. Audi currently assembles TT Coupé, TT Roadster and A3 Cabriolet models at its Gyor plant.

Click on the link below for a chart of the top 10 automotive manufacturing destinations

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