FDI In Automobile Industry

FDI in Automobile Industry.

Behind FDI, it is necessary to see first of all the companies that its decision to move some functions of the value chain abroad management of company always pursue certain specific objectives. There are four basic types of investment:

Investments aimed at increasing efficiency - trying to increase their competitiveness and production efficiency, and the result is usually an international specialization of individual activities. The most common way of increasing competitiveness is to move production to countries with lower costs for procuration of production factors

Resource-oriented investments - investor wants on foreign market obtain access to resources of production factors, technology and managerial, operational or organizational know-how. Corporations typically seek abroad the resources that are in their home countries either unavailable or too expensive.

Investments focused on strategic assets / capabilities - Strategic investors are looking abroad to obtain certain strategic assets in order to increase their own global competitiveness, profitability, efficiency, or to protect their specific competitive advantages. The needs to gain access to modern technologies, unique knowledge thus acquired or restore innovation potential (BALÁŽ P., 2010).

In order to show and present how important FDIs are for countries, we have picked a case study. The case study concerns one country and one industry that are hand in hand to work in symbiosis. The example is Slovakia and Automotive industry where both have profitable relationship. In this case we are going to present facts, factors and reasons why this situation has occurred and how it is affecting Slovakia as a country.

together 200,000 people are employed directly & indirectly by the automotive industry

the automotive industry has 43% share of the country's total industrial production

the automotive industry has 35% share of the total industrial export of Slovakia

the automotive industry generates 17 billion € of industrial export

+17% average annual car production growth for the last 5 years

highest labor productivity in the CEE (Central and Eastern Europe) region

Abstract: This analysis shows overview of automotive sector in Slovakia and factors behind. It presents facts in nice graphic overview. The parts in analyses are summarized in points. The points which are presented are based on official governement sources.

Source: PETI, Tomáš: Impact of foregin direct investments of European Union on competitiveness of European Union – University of Economics in Bratislava. Bratislava: FC UE, 2014, 55 pages.

Abstract: The bachelor work Impact of Foregin Direct Investments of European Union on competitiveness of European Union analyze influence and connection between foregin direct investments of European Union and competitiveness of European Union in the world´s economy. This essay represents teoretical ground of words foregin direct investments and competitiveness, whose understanding is very signicant for whole presented bachelor work.Besides this essay analyzed the flows of foregin direct investments of European Union, foregin direct investments stocks, sectorial diverzification of FDI, forms of FDI and competitiveness of EU.