As the worldwide automotive industry faces one of its most challenging periods in history, those global locations heavily involved in the manufacturing of vehicles will need to become more competitive to survive. While car production is being scaled back in Europe and the US, with signs that the emerging economies of the East are soon to follow, it will become increasingly difficult for second-tier cities to maintain the lead they have taken in the global investment location stakes during the past few years.
But for now, fDi’s automotive rankings have found that the top city location in Europe for automotive manufacturing is Izmir in Turkey, a second-tier city. It was no surprise that in Asia-Pacific, Shanghai ranked as the top city for automotive manufacturing. And predictably, North America’s Detroit ranked number one city, with Monterrey, Mexico making second place.
While the US remains by far the quality destination of choice for automotive manufacturing, in a cost and quality analysis the top four countries include the typical low-cost destinations of India and China, but also, punching well above their weight, Vietnam and Ukraine, the latter of which grabs the top spot.
Cost and quality
The rankings are produced by fDi Benchmark, an online subscription database, which benchmarks the cost and quality competitiveness of more than 300 countries and cities worldwide across more than 30 sectors.
The fDi competitiveness indices for auto components and automotive final manufacturing are based on an evaluation of more than 100 location factors. Key factors assessed include: size of the labour force in transport equipment; flexibility of labour relations; size of the auto components and original equipment manufacturer sector; track record in attracting automotive inward investment; high-tech manufacturing exports; quality of infrastructure; quality of the regulatory environment; and total labour costs for production operatives, production managers, quality control specialists and engineers.