Beginning in the 2000s, as Central and Eastern European countries began to join the EU in earnest, new manufacturing production bases within the EU were established in Central and Eastern Europe. This marked the beginning of a full-scale expansion of Korean companies targeting the EU market. This expansion was concentrated in the V4 (Poland, Hungary, the Czech Republic, and Slovakia) countries between 2006 and 2007. From the late 2010s until recently, Korean companies’ expansion into Central and Eastern Europe shifted to investments in batteries, electric vehicles, renewable energy, and R&D, shifting investment patterns toward eco-friendly and cutting-edge industries and key supply chains. Recently, LG Energy Solution and its partners completed their secondary battery expansion in Poland, while SK Innovation, Samsung SDI, and their partners completed their secondary battery expansion in Hungary. These efforts not only address the EU’s comprehensive environmental regulations and supply chain restructuring but also establish a bridgehead for entry into the European market. Meanwhile, as part of China’s global supply chain restructuring strategy, large-scale greenfield investments are continuing, focusing on eco- friendly electronic components and finished automobiles. Hungary is establishing itself as a key base for China’s European expansion strategy.

With 20 years having passed since Korean companies began expanding into Central and Eastern Europe, it is crucial to assess the progress made, analyze the challenges they face, and explore solutions. The V4 region is currently emerging as a major production base in the EU. Local investment and expansion by both Korean and Chinese companies, particularly in the battery sector, have led to a labor market environment nearing full employment. Consequently, recruiting difficulties are the most significant obstacle for Korean companies operating in the region. The V4 government has recently adopted “protection of strategic industries” and “selective acceptance of foreign capital” as key economic policies. Investment policies are evolving, with a focus on welcoming foreign investment in strategic sectors and emphasizing linkages with R&D investment. China’s recent aggressive investment in Central and Eastern Europe, including Hungary, is expected to impact the local management environment for Korean companies already operating in the region. Therefore, it is crucial to develop a response strategy that goes beyond mere competition and builds on the strengths of the Korean companies operating in the region.

This study assessed the 20 years of Korean companies’ expansion into Central and Eastern Europe (CEE). It examined their motivations and strategies and analyzed their performance over the past 10 years. It also examined the prospects and challenges facing Korean companies’ expansion into CEE. Based on this analysis, it presented policy implications, including implications for the recent expansion of Chinese companies.

Compared to the initial 10 years of CEE accession, Korean companies’ investment in CEE over the past 10 years has been primarily focused on the EV and EV battery sectors, responding to EU policies. Conversely, compared to the initial 10 years, the focus on manufacturing, particularly automotive and electronics, has eased somewhat. Furthermore, Korean companies’ sectors of expansion have expanded to encompass a wider range of sectors, including biotechnology, energy, defense, and medical services. The positive correlation between Korean companies’ investment and exports remains robust over the past 10 years. Consequently, this suggests that the large-scale investment by Korean companies in CEE has led to a sustained increase in Korean exports to the region, rather than a temporary one. This could counter the traditional concern that “foreign direct investment will hollow out domestic industries.” In other words, it aligns with recent major analyses showing that, in an era of global supply chain fragmentation, the expansion of overseas direct investment by Korean companies actually leads to increased regular employment and sales at domestic parent companies.

Recently, relations between China and the V4 countries have been complex and nuanced, driven by economic interests as well as political and strategic factors. Chinese investment patterns have also varied across the V4 countries. Hungary, which has shown the most pro-China stance, has become a key investment destination for Chinese companies not only within the V4 but also within Europe, thanks to its government’s proactive investment promotion policies. Slovakia, which has historically had relatively minimal relations with China, is also showing signs of change by attracting Chinese investment in electric vehicles and batteries. Hungary and Slovakia have diverged from the EU’s China policy, adopting a more favorable stance toward Chinese investment. In contrast, Poland and the Czech Republic, in solidarity with the EU’s China strategy, are adopting a more cautious approach to relations and expressing caution regarding Chinese investment. Comparing the investment landscape of Korean and Chinese companies in the V4 reveals significant differences in the countries of investment, timing, sectors, and key issues. While Korean companies focused on the automotive industry in the mid-2000s, primarily in the Czech Republic and Slovakia, they have recently focused their investments in Poland and Hungary, focusing on EV batteries. In contrast, Chinese companies have been making large-scale investments in the EV and EV battery sectors, particularly in Hungary, since 2020. Korean companies, which have established European manufacturing production bases in the V4 since the mid-2000s, are currently facing challenges due to rising prices, soaring production costs, and labor shortages in the V4 economies. Meanwhile, Chinese companies, which have recently focused on the EV and EV battery sectors in Hungary and are currently in the prototype production stage with plans to commence full-scale production soon, are facing changing negative perceptions of China among EU citizens and EU-level regulations on China.

To address the immediate challenges identified in the evaluation of Korean companies entering Central and Eastern Europe, companies should first strengthen their ESG management and corporate social responsibility (CSR) capabilities at the corporate level to enhance their local image and avoid being subject to EU regulations. Furthermore, given the recent strengthening of the EU’s economic security strategy, they should closely monitor the new regulatory trends resulting from these changes and comprehensively assess their impact on Korean companies. Furthermore, the recent large-scale expansion of Chinese companies into Central and Eastern Europe requires a fundamentally different approach based on the differences between the two countries. Korean companies should leverage the already established cooperative foundations across the V4 to respond to China’s large-scale expansion into Hungary. In the remaining three countries, excluding Hungary, cooperation can be strengthened by actively leveraging the reluctance of European global OEMs to rely solely on Chinese companies due to geopolitical risks and frequent tensions between the EU and China.

The V4, where Korean companies have the largest presence in Europe, is no longer a region with the lowest production and labor costs in the region. Accordingly, the manufacturing- and V4-centric strategy for entering Central and Eastern Europe is no longer viable. Furthermore, the large-scale expansion of Chinese companies into Hungary is expected to intensify competition with Korean companies already operating in the region and exacerbate labor shortages. In other words, a comprehensive reexamination of the fundamental framework for Korean companies entering Central and Eastern Europe is necessary. Therefore, a new mid- to long-term strategy for entering Central and Eastern Europe for Korean companies should consider three key elements: first, reassessing entry goals; second, expanding entry regions; and third, diversifying and deepening entry sectors. In addition to the company-level entry strategies discussed so far, government support should be provided to address issues that companies cannot address on their own, such as employment and labor shortages, competition with Chinese companies, Korea-EU and Korea-V4 cooperation, and improving local living conditions.

국문요약

제1장 서론
1. 연구 배경 및 필요성
2. 선행 연구
3. 연구 구성 및 방법

제2장 중동부유럽 경제와 한국기업 진출
1. 중동부유럽 경제 현황
2. 중동부유럽 EU 가입 초기 10년의 한국기업 진출
3. 최근 10년의 한국기업 진출 추이 및 주요 특징
4. 한국기업의 중동부유럽 진출 당면 과제

제3장 중국기업의 중동부유럽 진출 특징
1. 최근 중국기업 진출 추이 및 현황
2. 중국의 V4 국가별 투자 특징 및 주요 이슈
3. 평가 및 전망

제4장 결론 및 정책적 시사점
1. 연구내용 요약 및 평가
2. 정책적 시사점

참고문헌

Executive Summary