The few automotive suppliers with operations in the Baltics are uncertain whether the emergence of nearby St. Petersburg, Russia, as a car production hub will help or hurt.
The growing Russian automotive market could be a positive influence on suppliers with locations in the Baltic states of Estonia, Latvia and Lithuania. The partsmakers hope to benefit from the low wages and economic security of new EU members to supply Russia.
On the other hand, suppliers may decide to move to Russia to be closer to the developing cluster of auto assembly plants.
Toyota is to build a factory in St. Petersburg, joining the Ford factory already there. The two will have a joint production of 100,000 annually. Mercedes-Benz also has pledged to build a plant in St. Petersburg, with an announcement likely before autumn.
"Suppliers are waiting to see what happens next," said analyst Antonio Ferreira in CSM Worldwide's London office. Suppliers view the Baltics as the far northern edge of a European market, so most investment has headed further south in central Europe with interest only just starting in the North, he said.
But expectations for the Baltics are positive, even without the recent surge in Russia.
"The macro forecast for the Baltics shows that they will continue to enjoy solid growth and a strong rise in trade," said Ewa Root, a London-based analyst with Global Insight. "I would not think their role as trading hubs between Russia and the rest of the world is threatened."