General Motors is concentrating its central European production operations in Poland in the belief that the Polish car market will one day become bigger than the UK's.
GM's Opel was No. 4 in the Polish market with sales of about 60,000 units last year, a 5.3 percent share.
GM's newest European factory is in Gliwice, Poland. It makes the Astra and the new Agila minicar there. More than 95 percent of Agila production is exported to western Europe.
Building the Agila in Poland - with its high productivity and low labor costs - has enabled the car to be priced competitively, say senior GM executives.
If Agila demand exceeds capacity in Poland, GM's partner Suzuki could build the car in Hungary. Suzuki has its own plant in Hungary that makes the Wagon R+, the sister car to the Agila.
GM has invested about $500 million in Poland. New investments could push spending there to more than $1 billion within a few years.
GM is closing a small plant in Warsaw that assembles the Vectra from kits. A cut in duties on imported cars has eliminated the need for the plant. With Warsaw shut, Gliwice's capacity will be increased from 90,000 units to 150,000 by 2001.
GM and alliance partner Fiat Auto plan to build a joint-venture engine factory in Poland. The plant will make 460,000 diesel engines a year.
Fiat could also benefit from GM's engine and transmission operations in Szentgotthard, Hungary. The plant stopped production of the Astra in 1998 with the opening of the Gliwice factory.
GM now makes cylinder heads and 1.4-, 1.6- and 1.8-liter, 16-valve engines at Szentgotthard. The plant will produce 500,000 engines and 300,000 cylinder heads this year.