Nearshoring the automotive supply chain

: an analysis of Serbia as a hub for automotive part production

Abstract

The automotive industry has continuously evolved from its inception. Currently the industry is comprised of complex supply chains spanning the globe. Disruptions to these supply chains can cause issues for automotive manufacturers leaving them with a shortage of parts. Auto part suppliers are now looking to nearshore their production to emerging markets in Europe. Serbia has a rich history of automotive production, however harsh sanctions placed by the United Nations during the early 90’s saw the industry all but vanish. In the past decade, the automotive industry has re-emerged due to large amounts of foreign direct investment. Now Serbia is positioned as a potential hub for automotive part production in Europe due to having some of the lowest wages in Europe coupled with a large unemployed population. This study analyses the opinions of industry professionals working within the country to form a comprehensive analysis on the risks and benefits of doing business in Serbia. It also considers the most beneficial auto part to produce in the country. Opinions and data show that Serbia’s current political climate point towards a “Business Friendly” atmosphere for foreign investors. There is no limitation on the type of auto parts that can be produced in the country, however, parts with a low-skill level to produce and a high labour intensity (LSHI) tend to hold the smallest risk to achieve profitable production when deciding to operate in the country.

Date of Award	4 May 2021
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Peter V. Rajsingh (Supervisor)