Transformation of the Central and East European Passenger Car Industry: Selective Peripheral Integration through Foreign Direct Investment

Abstract

The Central and East European (CEE) passenger car industry underwent major transformations through foreign direct investment (FDI) in the 1990s. The author demonstrates that the effects of FDI on the passenger car industry have been profound, but geographically uneven. To understand the different regional and local strategies of foreign car producers better, the author introduces a classification of FDI in the passenger car industry based on the degree of embeddedness in local economies and relationships to path dependency in the 1990s. The effects of FDI on selective peripheral integration of parts of CEE into the European car production system, as well as the role of Central Europe in the division of labour in the European passenger car industry, are also considered.

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