Bulgaria is considered as one of the possible locations for a new plant of Czech car maker Skoda, the German news portal Handelsblatt reported. Skoda needs additional production capacities to meet growing demand while its parent Volkswagen has reportedly rejected the idea for Skoda to build another plant in its home Czech Republic due to labor shortages. Apart from Bulgaria, Turkey was also in the running for the investment, according to the daily. The new plant will reportedly produce not only Skoda models but also cars under the rest of the Volkswagen parent group. There were no details on the possible size of the investment or the number of jobs created. A decision on the investment was expected to be taken in early 2019.
Bulgaria has been so far bypassed as an investment destination by major car producers and has only managed to attract smaller-scale car supplier investments. Lack of state support, poor infrastructure and bureaucracy are the main factors preventing Bulgaria from attracting benchmark investment projects, in our view. Moreover, we think that Bulgaria is currently also suffering from labor shortages while its EU membership should be an advantage over Turkey in the competition for the reported Skoda investment.