Reducing Manufacturing Expenses is Necessary, According to Citroën CEO
Citroën Shifts EV Production to Eastern Europe for Cost Competitiveness
Citroën, the French automobile manufacturer, is expanding its battery-electric vehicle (BEV) production to Slovakia and Serbia as part of a strategy to compete with Chinese manufacturers on cost. This approach takes advantage of lower labor and production costs in these Eastern European countries, enabling Citroën to produce EVs more affordably than if they were manufactured solely in Western Europe.
The move benefits Citroën in several ways. By manufacturing in Slovakia and Serbia, the company can access the European single market without incurring import tariffs and logistics costs associated with importing Chinese vehicles. Additionally, the existing automotive infrastructure and skilled workforce in these countries are utilised, along with potential incentives or favourable regulatory environments promoting local production.
This production strategy has implications for job markets in car manufacturing. The creation and sustenance of manufacturing jobs in Slovakia and Serbia strengthen local economies, while potentially shifting employment from countries with higher production costs, such as Western Europe. Increased demand for skilled workers in assembly, quality control, and supporting automotive sectors is also expected.
However, the concentration of production in lower-cost countries may exert pressure on higher-cost labor markets, leading to job offshoring and job security concerns in some Western European locations.
Citroën's strategy aligns with cost competition and workforce localization trends typical in the European automotive sector adapting to EV production. While the specific job market numbers are not detailed, it is clear that this strategy reshapes employment patterns in European car manufacturing, boosting jobs in Slovakia and Serbia while contributing to regional shifts within the industry.
In other news, the BEV version of the new C5 Aircross midsize SUV is launching this week. The éC3 BEV by Citroën, which sells for €23,000 ($26,000), is currently built at the Stellantis facility at the Trnava site in Slovakia, with the Kragujevac plant in central Serbia also contributing to its production. The plug-in hybrid version of the new C5 Aircross midsize SUV will be available in European markets in the second half of 2025, claiming a 62-mile (100-km) electric-only range in urban areas.
Price is considered vital in attracting consumers to switch to battery-electric vehicles, and Citroën's CEO, Thierry Koskas, believes that the ability to match production costs is crucial for competition. Koskas hopes Citroën will be able to match Chinese prices with the BEV version of the new C5 Aircross midsize SUV.
While automation will be a key feature of BEV manufacturing, some auto executives predict that it could lead to fewer jobs overall in the car-making process. Nonetheless, Citroën's strategy demonstrates a commitment to cost competitiveness and workforce localization in the rapidly evolving EV market.
[1] BEV Production Strategy: Citroën's Eastern European Expansion [2] Employment Patterns in European Car Manufacturing: A Case Study of Citroën
- In line with strategic cost competitiveness, Citroën's decision to manufacture electric vehicles in Eastern Europe, particularly in Slovakia and Serbia, shows a commitment to utilizing technology to produce affordable electric vehicles, aligning with global trends in the sports industry, (the evolution towards electric vehicles can be considered a sport-like race for automobile manufacturers).
- The significant partnership between Citroën and the battery-electric vehicle (BEV) technology in Slovakia and Serbia is expected to generate job growth in the assembly, quality control, and supporting automotive sectors, contributing to the technology-driven sports of automotive manufacturing, with potential impacts on employment patterns across Europe.
