A third of European cars is produced in CEE

On the radar

• Lorem inflation in Poland increased marginally to 3.4% y/y in June.
• Today, Serbia will publish current account data.
• Otherwise, there are no releases scheduled.

Economic developments

Passenger cars comprise almost 90% of car production in EU27, while the CEE region accounts for roughly 30% of the total passenger car production in Europe. The production dynamics in the post-COVID era were mixed. Until 2023, passenger car production was growing and in 2024 it eased slightly. As for other insights, in 2022, the region surpassed Germany in finished vehicle production. The CEE region still holds a cost advantage that has been diminishing in the face of the energy crisis. European car manufacturers are still among the largest, but China dominates the EV market. At this point, the automotive sector faces 25% tariffs from the US. In 2023, the United States was the largest consumer of EU automotive products, accounting for 20% of the total EU domestic value added.

Market movements

President Donald Trump said he would send letters to more than 150 countries notifying them their tariff rates could be 10% or 15% as he forges ahead with his trade agenda. We believe the news could be supportive for the CEE currencies on Wednesday as they strengthened against the euro. There is no major news on local markets.

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