BULGARIA CIS CZECH REPUBLIC HUNGARY CENTRAL POLAND ROMANIA RUSSIA SLOVAK REPUBLIC SLOVENIA Since 1996 EUROPE The Source For Automotive Information On Central Europe™ AUTOMOTIVE May 1998 REPORT™ On The Web at http://www.cear.com™ Volume III, Issue 5 ISSN 1088-1123 Bimet was privatized in 1994 and has about Profile Regional Market 600 employees. In 1997, the company’s Highlights sales hit about $12 million. Glassmaker Pilkington Poland Sobieslaw Zasada Centrum Increasing Liquidity of Shares Automotive Federal Mogul Buys Polish Bearings Edward Nowak, the new president of Maker Goes Solo in Poland Polish vehicle manufacturer Sobieslaw Zasada Centrum (SZC) and former Federal-Mogul Corporation announced Pilkington Automotive Poland is taking deputy minister of the economy, said at a on March 11 that it has purchased on the automotive glass market in Poland. press conference on March 24 that the approximately 95% of the common stock company intends to increase the liquidity of The company, owned by Pilkington Plc, is of Polish automotive supplier Bimet S.A. its shares on the Warsaw Stock Exchange Poland’s largest producer of automotive Bimet, located in Gdansk, Poland, by introducing a greater number of shares windscreens. manufactures engine bearings, bushings, held by SZC onto the market. and related products. The terms of the sale Pilkington started were not disclosed. In this way, SZC would be operations in Poland transformed from a family in 1993 through a “We are driven to be a competitive player business into a genuine public joint venture with a in the global powertrain products market company. Nowak said his most state-owned glass and the addition of the Gdansk team pressing task is to prepare, by the factory in Sandomierz provides us with a low cost, high quality end of April, a plan for the SZC in south-east Poland. production environment,” said Alan group’s strategic development, The joint venture — Johnson, executive vice president, which should first and foremost Powertrain Systems. Pilkington involve reducing operating costs. Sandoglass — produced automotive In This Issue Nowak announced that some glass and a wide surplus assets would be sold. range of glass for the Feature Country: Romania Some subsidiaries, like Zaklady construction industry. • Auto Electronics Review: p. 5 Samochodowe Jelcz SA in Jelcz Ryszard Jania • Romanian Aftermarket (Wroclaw province) will be able As of April 1, 1998, to go onto the stock exchange. “The Distribution King: p. 6 Pilkington Automotive Poland purchased • group’s initial spontaneous development ERP Software Eases Daunting the automotive glass business from Manufacturing Tasks: p. 9 should be replaced by ordered Pilkington Sandoglass and the two • Romanian Sales Statistics: p. 16 development,” Nowak emphasized. “What • Quality Lesson 2 — Achieving Quality is needed now is a total change of our companies now operate as totally Improvement Success: p. 11 company’s image.” separate entities. • Improving Russian Vehicle Manufacturers’ Technology: p. 14 No Details On SZC/Hyundai Assembly Pilkington is currently investing £20 • Romania’s Investment Ordinances: p. 15 Agreement million ($33.5 million) into the • Regional Special Report: Consulting construction of a new plant in Poland for Companies: p. 10 The details of SZC’s agreement with the production of windscreens and window • Hungarian Supplier List: p. 21 Polish government regarding the sets. The new plant will be located in • New Product Review — Gerodisc Traction construction of a factory for Hyundai Atos Sandomierz. Pilkington currently employs Technology: p. 22 cars in Starachowice have yet to be made 155 workers in Poland, and this figure is • TRW Holding Steady in Czech Republic: p. 24 Continued on Page 2 Continued on Page 12 Visit the CEAR Central Europe Automotive Forum™ at http://www.cear.com/autoforum or click here CEAR.COM ™ Highlights Continued from Page 1 CENTRAL with its largest customer base in Central and South America. EUROPE public. The Koreans are to propose the AUTOMOTIVE cooperation guidelines by May 28, which C. F. Gomma operates with factories REPORT™ will be the basis for defining and signing in Italy, Poland, Turkey, China, appendices to the preliminary agreement India, Brazil and Argentina. with the Ministry of the Economy. This May 1998 will be decisive for whether SZC receives New Car Sales Off In Poland Volume III, Issue 5, ISSN 1088-1123 a concession for duty-free assembly of some Hyundai models. New car sales in Poland dropped almost a percentage point during the Daewoo Says GM Deal Won’t Change first two months of 1998, according Polish Investment Plans to figures released by SAMAR, s.c.. Sales totaled 84,447 units at the end After Daewoo Group Chairman Kim of February. Although local Woo-Choong announced on March 26 production was up 26% to 62,258 that General Motors Corp. might units, imports were off over 38%. purchase up to 50% of the shares of Sales of new commercial vehicles Ronald F. Suponcic, Jr. Jeffrey A. Jones, Esq. Daewoo Motor, Daewoo representatives also dropped, slipping over 8%. CV Publisher Editor-in-Chief in Warsaw stated yet again that this sales were hurt by an almost 13% would not result in any changes in drop in domestic production. Editorial Assistant Daewoo’s plans or investment volume in Barbora Grossmannova Poland. Czech Republic Research Assistant According to Daewoo, although the Katarina Trginova Skoda Profitable in ’97 agreement might give GM some Design management power, ultimate managerial Skoda Auto recorded an after-tax Big Sky Creative power will be left with Daewoo. A deal Caroline Bond, profit of CZK 1.168 billion ($338 is expected to be completed by [email protected] million) in 1997, the company September. Web Site Design announced at its annual press conference in Mlada Boleslav on Big Sky Creative Car Loans Complicated by New Bank Ron St Clair March 19, 1998. Skoda’s turnover [email protected] Collateral Register totaled CZK 90.095 billion ($2.61 billion), an increase of 53% over Reporters The less dynamic new car sales trend in Catalin Dimofte, Bucharest 1996’s figure. Skoda, the largest Poland may be partly attributed to the company in the Czech economy, is Magda Sowinska, Warsaw new national bank collateral register. Pavol Varga, Bratislava the country’s largest exporter, The new register, introduced on January Bostjan Okorn, Ljubljana accounting for 8% of total Czech 1, 1998, makes the procedure for exports. Columnists obtaining loans for car purchases more Ray Barker, Avon Rubber complicated. The mandatory register Ron Barden, Price Waterhouse Romania In 1997, Skoda increased its entry costs PZL 200 ($55) and only a few worldwide sales by 28.8% to banks have decided to cover this cost 336,334 cars. The company’s new The CENTRAL EUROPE AUTOMOTIVE REPORT™, themselves, with the majority preferring Octavia model accounted for almost 4800 Baseline Rd., Suite E104-340, Boulder, CO to have the customers pay the fee. 80303, USA, is published monthly, except August, by 48,000 units, while the remaining Central European Trade & Marketing, L.L.C. in Boulder, sales were of Skoda’s bread and C.F. Gomma Purchases Weatherhead Colorado. butter Felicia models. Production at Brake Hose Division The entire contents of this magazine in print and Skoda’s three plants in the Czech Republic increased over 35% last electronic formats are copyrighted 1998 by Central The Italian company C.F. Gomma European Trade & Marketing, L.L.C. with all rights year to a record 357,170 units. reserved. Reproduction or use in any form, without Sp.A., a manufacturer of air springs, brake hoses, and anti-vibration permission, is prohibited. Annual subscriptions are At the press conference, Skoda USD$500 for the Standard Print and Email Edition and components, has purchased USD$900 for the Analyst Edition. reconfirmed its commitment to raise Weatherhead Brake Hose Division, annual production to 500,000 formerly a division of the Dana Business, Editorial, Subscription, Advertising, vehicles by the turn of the century. Market Research, Delivery Problem Inquiries to: Corporation. CENTRAL EUROPE AUTOMOTIVE REPORT™ The purchase will give C.F. Gomma a Hungary Business and Circulation Office market share in the brake hose sector of 4800 Baseline Rd., Suite E104-340 Hungary Possible Site For Ford Boulder, CO 80303 USA nearly 18% in 1998, the largest share Tel: +1-440-843-9658 Fax: +1-206-374-5282 worldwide, followed by Delphi and Investment Email: [email protected] Toyoda Gosei, who each have a 12% share globally. C.F. Gomma’s sales are Bratislava • Bucharest • Budapest • Cleveland expected to top $270 million this year, More Market Highlights on Ljubljana • Prague • Warsaw Page 4 2 May 1998 • CENTRAL EUROPE AUTOMOTIVE REPORT™ http://www.cear.com™ © Central European Trade & Marketing, L.L.C. 1998 CENTRAL EUROPE AUTOMOTIVE REPORT™ EDITORIAL CALENDAR The Source For Automotive Information On Central Europe On The Web at http://www.cear.com 1998 Issue Feature Automotive Reviews Special Reports Close Date Jan 98 Poland Body/Chassis 1997 Year in Review/ Dec 10, 1997 1998 Forecast Feb 98 Hungary Central Europe’s na Jan 10, 1998 Executive of the Year Mar 98 Czech Republic Components & Systems Auto Aftermarket Feb 10, 1998 Apr 98 Slovak Republic Marketing & Advertising na Mar 10, 1998 May 98 Romania/Bulgaria Electronics Auto Consultants Apr 10, 1998 Jun 98 Poland/Slovenia OEM Special: Who Supplies Who na May 10, 1998 Jul 98 Hungary Powertrain Exporting to Jun 10, 1998 Central Europe Aug 98 Not Published Sep 98 Czech