China investment helps Austria to benefit from electric car boom
When Chinese SUV giant Great Wall decided to build a new r&d center in Europe to engineer electric drivetrains, it avoided the obvious locations of Germany and the UK. It picked Austria instead.
Austria is best known in automotive circles for being home to Magna International's contract manufacturing firm Magna Steyr and also engine developer AVL. But it is quietly becoming a hotbed of vehicle development.
The trend is partly due to tax breaks available to companies investing in r&d. But Great Wall saw the attraction elsewhere, says Markus Schermann, the newly opened r&d center's general manager.
Schermann cites three main factors in Great Wall's investment: proximity to companies that offer e-drive technology and components; the short distance to e-drive research facilities; and a good pool of engineers trained in the field. "We realized there might be some subsidies," Schermann said. "But those were not considered during the decision process."
Great Wall was assisted by the government's Austrian Business Agency (ABA), which helped the company find land close to the Vienna airport. Anyone investing in r&d in Austria receives a tax credit equal to 14 percent of all expenses in the following year. But apart from that, no special incentives are available to automotive firms.
ABA figures show around 800 firms in Austria are working on future mobility. Those working on autonomous technology can take advantage of test center ALP Lab, which offers both simulation and test tracks. Last September, Kreisel Electric, an Austrian developer of high performance batteries for vehicles, also opened a new r&d center in Rainbach, Upper Austria.
This year, Magna Steyr in Graz started production of the Jaguar I-Pace electric car, after launching the Jaguar E-Pace small SUV. It also makes the BMW 5 series. Meanwhile BMW said earlier this year that one in two BMWs sold globally comes fitted with an engine made in its plant in Steyr, Upper Austria.
This story appears in the 2018 Guide to Economic Development in the Global Auto Industry. To view the entire supplement please click here.