Demographic trends in the automotive industryCost pressures, new competitors from other industries, new supplies and technologies, and demographic trends are coming with each other to boost pressure on automotive companies and their suppliers. The automotive sector is among the sectors that have seen the largest expansion and in-flow of foreign investment more than the previous decade. According to the Automotive Cluster Bulgaria, the leading automotive business body in the country, the sector employs 1% of Bulgaria workforce and contributes to much more than 3% of GDP. Some of the biggest international automotive players have production facilities in Bulgaria. Low labour costs, qualified and skilled labour force and relative proximity and cost-free access to huge West European markets, make Bulgaria an eye-catching location for huge automotive companies hunting to expand their operations.
Demographic trends in Bulgaria are amongst the worst in the world. The country’s population has been continually shrinking given that the early 1990s and it population is projected to decline to 5.5m in 2050, from about 7m in 2016 and 9m in 1990. This has two essential implications for the automotive sector: availability of labour and size of the marketplace.
This investigation sheds light on which carmakers’ revenues have important positive or damaging impacts on state employment and GDP growth by means of longitudinal regression models of the complete automotive sector and the automotive parts sub-sector. Especially, fixed-effects models are employed that manage for special traits in every of the 48 contiguous states over this ten-year period, even though also controlling for other critical variables talked about above. 11 Although the outcomes share exciting insights, these models should not be interpreted as predictive causal relationships and person elements (such as the income of a specific carmaker) can only be interpreted in relation to other factors contained within every model.…Read More