Later this month, a band of industry experts will gather at the British Embassy in Budapest to toast Europe’s automotive success in time-honoured fashion.
The big wigs of industry will raise champagne glasses with Formula 1 consultants and academia from the region’s best universities and research centres.
The entire automotive and aerospace supply chain will champion business opportunities in Europe, and talk-up the industries’ increasingly positive outlook.
Attendees from emerging Europe, including car-making powerhouses Slovakia and the Czech Republic, plan to showcase the best of industry technology and innovation. It will provide a thrilling build-up to the Hungarian Formula 1 Grand Prix.
The Continent has much success to celebrate. The automotive sector in particular is a dynamically developing part of its industrial base. Turnover in emerging European countries has risen to more than £100 billion – nearly twice the size of the UK's £60 billion automotive industry.
According to UK Trade and Investment data, these emerging nations’ automotive ambitions contribute approximately 10% to the region’s GDP.
Carmakers in Austria, Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia are set to have increased Europe’s output by 170% between 2009 and the end of this year.
Europe has been good to managers. With an estimated half-million jobs created by its emerging countries’ automotive industry, it has proved to be one of the most promising career paths.
The sector has been no less lucrative for MBA graduates, who are driving a large chunk of the global motor makers. In Europe, MBAs are banking anything between $81,000 and $180,000 in senior-level jobs, according to a recent GMAC survey.
An estimated combined 24% of MBA graduates are working in manufacturing or technology in Europe – individually on a par with consulting, and together topping finance and accounting – according to GMAC’s data.
In the heart of Europe, the UK’s manufacturing employment, including the manufacture of products such as motor vehicles and aircraft, rose for the fourteenth successive month in June.
According to Markit and CIPS UK Manufacturing PMI data, job creation is at a 39-month high.
Commenting on the glorious career prospects within the UK’s manufacturing base, David Noble, group CEO at the Chartered Institute of Purchasing and Supply, said: “Over the second quarter, firms have enjoyed their best spell of output growth for 20 years, and in response have been able to boost employment even further this month. A rise in the number of jobs was seen across all sectors.”
The rapid hiring spree underscores the surprising turnaround of automotive sales in Europe. Car sales in the EU rose above 10% earlier this year, and are up more than 8% so far in 2014. That is a far cry from 2013, when sales were at a two-decade low.
The sector goliaths including AUDI AG, BMW and Mercedes are enjoying the fruits of their foray into the motor lanes.
Analysts are hopeful that 2014 will be the first full year in seven that car sales are driven up on the Continent. The UK and Spain are the stand-out performers, but key markets Germany and Italy have reported growth above 5%, according to data from the European Automobile Manufacturer's Association.
David Saravia, a pre-logistics MBA intern at AUDI AG in Germany, says: “After a six-year contraction, the European automotive sector has been sparked back up by the recovery of the US economy, the strong economic position of some Asian countries and the slow European economic recovery.
“In addition, most of the European carmakers have expanded their portfolio, helping to attract new customers and expanding their reach, whilst providing more options for their current ones.”
MBAs may turn their noses up at emerging regions, which promise growth but languish behind the career opportunities in Central Europe, yet some outsider nations are driving the region’s innovation and ambition.
The 44 manufacturers operating across Europe’s designated emerging countries produced more than 3.5 million vehicles in Central and Eastern Europe last year.
Perhaps surprisingly, in 2012 Slovakia had the highest per capita rate of car production in Europe with 167 vehicles per 1,000 inhabitants, more than four times the EU average of 35 vehicles per 1,000 inhabitants, according to the UKTI.
The Czech Republic, Europe’s biggest overall carmaker, comes second with 122 vehicles per 1,000 inhabitants, one spot above Germany. There are more than 800 companies working in the Czech Republic – and total production is close to a fifth of the country’s entire industrial output.
“[The] Czech Republic has the best infrastructural facilities amongst the CEE countries,” says Alay Mehta, a Manchester Business School MBA graduate who has worked in the automotive sector for several years.
He adds: “[A] high number of local suppliers implies lower procurement cost for manufacturers, and thus attracts investment – [there are] attractive foreign investment policies and reforms.”
Britain is hoping to tap into the market’s potential. To the backdrop of Lewis Hamilton, Fernando Alonso and co roaring through chequered flags, the UK is hoping to showcase the best of British automotive and aerospace technology in a couple of weeks’ time at the F1 extravaganza, such is the potential for growth.
Jonathan Knott, the UK’s ambassador to Hungary, said: “The industry in Central and Eastern Europe is increasingly demanding high quality suppliers, with great reputations, history, R&D capabilities and terms of business. And the UK’s automotive supplier base, more than anyone, can provide this.”
MBA students, for their part, share the optimism. Asked whether the sector’s surge is creating more career opportunity, all sources who work in the industry agreed: the economic recovery in Europe has led to portfolio expansion, and has created more MBA jobs.
“The current trend is definitely creating job opportunities for MBA students, mainly in operational improvement [and] lean manufacturing… There is a huge price war amongst manufacturers in Europe and every major brand is looking to find solutions to realise every cent in savings they can – hence improve revenues and profitability,” says Alay, who currently works with AUDI AG.
There is some good news for MBA students, but bad news for others. An engineering background will serve you well in automotive and aerospace careers.
The latter is less high-profile, but is still seeing double-digit growth across Central and Eastern Europe, according to the UKTI. They are both thought to be strategically important sectors across the Continent.
Yash Khandelwal, an MBA graduate of Nanyang Business School who worked for Tata Motors, says: “MBAs with an engineering background, primarily in electrical or mechanical, have the best chance of excelling.”
Many MBA students already have engineering backgrounds, fewer come from aerospace stock. However, the European aerospace industry is blossoming.
Airbus, in its Global Market Forecast, estimates that air traffic will grow at 4.7% annually, requiring over 29,000 new passenger aircraft and freighters at a value of more than $4 trillion between 2013 and 2032.
Even during the financial crisis, the European aerospace industry turned over €128 billion in 2008, according to the European Commission.
Neil Fry, a Cranfield SoM MBA graduate who first studied aerospace engineering at the University of Hertfordshire, remains confident: “I feel I am in a good position to add valuable transferable experience, as well as driving the next big leap in the automotive industry.”
Some European countries have relied on proximity to the West and lower labour costs, but that is no longer enough to thrive in the automotive and aerospace markets – “especially with competition coming in from BRIC countries,” says Alay.
Instead, the sectors and MBAs must rely on innovation. All avenues point to new technology.
“Technical innovation such as driverless cars by Google, smart LED headlamps by Audi, [and] electric cars that charge in very short time by Tesla, have already set benchmarks for future innovation and development,” says David, who studied his MBA at MIP.
He adds: “Audi has set-up the Audi City Retail Concept, a virtual showroom, in London, Beijing and Berlin that provides amazing customer experience, in-store innovative digital technologies, and more personal customer consultation. It’s a work of art.”