Toyota is leading this years surge in engine and transmission production in central and eastern Europe.
The Japanese carmaker will increase its volume in the region by 240,000 engines and about 300,000 transmissions, estimates London-based analyst Vik Barodia of Global Insight.
Toyota started production of its new 2.2-liter diesel engine at a new plant in Jelcz-Laskowice, Poland, in March. The four-cylinder engines will power Avensis models built at the carmakers assembly plant in Burnaston, England. The automakers other Polish plant, about 100km away in Walbrzych, started making a 1.0-liter gasoline engine this year for the minicars built in Kolin, Czech Republic, at Toyotas joint-venture plant with PSA/Peugeot-Citroen.
Barodia estimates Toyota will make 50,000 units of the 2.2-liter diesel in Jelcz-Laskowice and 190,000 units of the 1.0-liter gasoline engine this year in Walbrzych.
Toyotas planned capacity at its Jelcz-Laskowice plant is 180,000 units a year and the carmaker says it can build 250,000 engines in Walbrzych.
The Walbrzych plant also will produce transmissions for the three cars – the Toyota Aygo, Peugeot 107 and Citroen C1 – built in Kolin, where the annual capacity is 300,000 units.
Overall engine production in central and eastern Europe will increase 10 percent to 5.2 million units, Barodia forecasts.
Fiat and General Motors also are expected to contribute to the boost in engine making in the region by adding 150,000 units of their 1.3-liter diesel at the factory they share in Bielsko Biala, Poland.
The former powertrain partners split up their operations earlier this month. The only plant they continue to jointly operate is in Bielsko Biala. If Global Insights estimate for 2005 is correct, engine production in central and eastern Europe will have jumped 53 percent between 2000 and 2005.
The country making the biggest gain is Poland, where engine volume is on track to more than double to 1.5 million units this year compared with 2002, according to market researcher J.D. Power-LMC of the UK.
Slovakia also stands to gain. Getrag Ford plans to invest E300 million to build a transmission plant in Kechnec. A construction date has not been set.
But the region faces some threats. Barodia says that volume growth will be slowed as wage increases for workers in new European Union member countries such as Poland and Hungary eventually make those locations less competitive than, for instance, China.
He says he thinks that in the next five years European automakers may source complete engines and transmissions from China because the lower production costs will balance the higher logistics costs associated with getting the parts back to Europe. Automakers also face increased pressure from the Chinese government to produce the parts they need to build their cars at factories in China.