After Turkey’s Syria Operation, Southeast Europe Battles For Volkswagen Investment

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Four countries have jumped at the news that Volkswagen has postponed the decision on building a factory in Turkey, following Ankara’s military offensive in northeast Syria.

Volkswagen told EURACTIV on Wednesday (23 October) that it was not looking for a new location: “We follow the events very carefully. Planning for the new plant is still on hold – and we currently have no plans for other locations.”

However, Serbia, Bulgaria, Romania, soon followed by Croatia, have quickly made their pitch for the €1.4 billion investment. For any of the four, all of which are well below the EU’s average GDP per capita, the plant would be a major boost for the economy and a potential gamechanger.

Bulgaria, which had originally been shortlisted along with Turkey, reacted immediately, offering to double its offer for a direct government subsidy to VW from €130 million to €260 million, announced former President Rossen Plevneliev, who is now chairman of the Bulgarian automotive cluster. Plevneliev is known for his good contacts with influential circles in German politics and industry.

Bulgaria has also promised Volkswagen large-scale investment in infrastructure, including plans to build a highway to Vidin, a port and a bridge over the Danube, and investment in rail links from Sofia.

In Serbia, at a joint press conference with visiting German Economy Minister Peter Altmaier on Monday (21 October), an undeterred President Aleksandar Vučić said Serbia had offered Volkswagen more than all other countries.

“We offered more than all those countries. Everything they offer, we’ll offer more,” Vučić said. He explained that “Serbia is not an EU member like Bulgaria or Romania, and we don’t have a big market like Turkey”, but stressed that Belgrade could offer better subsidies.

Serbia has a joint venture with Fiat Chrysler Automobiles, producing the Fiat 500L model, while Romania is home to Renault (owner of Dacia) and Ford.

For her part, Romanian Prime Minister Viorica Dăncilă said the government had already contacted the VW management, and that Trade and Entrepreneurship Minister Radu Oprea had been to Germany to present Romania’s offer.

She said Romania offers various advantages, without giving further details, but blamed the opposition and president Klaus Iohannis and domestic political turmoil for the failure to secure investment from VW.

Gheorghe Falca, a PNL MEP, and a former mayor of Arad, a city in Western Romania, gave details of a proposed location for VW’s plant near Arad, saying the local authorities reserved 1,100 hectares of land for the potential investment.

Croatia publicly stated its intent to join the race for VW after Altmaier visited Zagreb on Monday (21 October).

“Our key aim is to regain the trust of German investors and assure them there is an investment-friendly atmosphere here, one of the most competitive legal frameworks and many comparative advantages, like a highly skilled workforce and the geostrategic position,” said Economy Minister Darko Horvat.

Meanwhile, Croatia’s electric car designer Mate Rimac, whose Rimac Automobili plant is partly co-owned by Porsche, a member of the VW group, revealed that he had taken part in a meeting between Croatia’s top government officials and managers from Porsche and Hyundai in June.

“There, we opened the communication channel between the government and the big players in the car industry. We presented very concrete measures Croatia should undertake to be attractive for such investments,” Rimac told the Vecernji List daily.

Post Author: Intercourier

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