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Flanders’ automotive industry: talent and innovation at the wheel
Despite its relatively small size, Flanders buzzes with automotive activity, accounting for:
- 302 companies and 47,595 direct jobs;
- EUR 16.4 billion in annual turnover;
- an annual investment value of EUR 385 million;
- EUR 3.3 billion in added value per year.
(source: Agoria, 2020)
A broad range of automotive research and knowhow
At the core of Flanders’ automotive industry are two car assembly plants – Volvo (Ghent) and Audi (Brussels) – as well as bus and truck manufacturers Van Hool (Lier), VDL Bus & Coach (Roeselare), DAF Trucks (Temse) and Volvo Trucks (Ghent). Together with Flanders’ dense network of universities and market-driven research centers, they create the right climate for continuous innovation and pioneering R&D in the automotive sector.
Case in point: DAF Trucks in Flanders
Part of the American PACCAR Group, DAF Trucks has steadily built an industry-leading reputation. Its network extends over 4 production facilities and 1,100 independent dealer locations worldwide. One of its main plants is located in Westerlo (Flanders), which celebrated its 50th anniversary in 2016.
Three years later, in 2019, the Dutch truck manufacturer geared up for the future with a EUR 200 million investment at its Westerlo axle and cab factory. CEO Harry Wolters: “Both production facilities enable us to continue growing in Europe and beyond. With our continuous investments, DAF Trucks demonstrates its confidence in the future of its activities in Flanders.”
As One of Flanders’ four strategic research centers, Flanders Make assists manufacturing companies in developing and optimizing their products and production processes. To this end, the research center offers research and innovation support, testing and validation services, and more.
What’s more, Flanders Make has a specific research track for motion-sensing products. Its aim? To develop and validate smart motion systems. Other automotive focal points include vehicle automation and vehicle electrification.
Various higher education institutes are your go-to partners for highly specialized and advanced automotive knowledge and expertise. Think of:
- Vives Hogeschool (in-vehicle networks);
- Karel de Grote Hogeschool (sustainable fuels);
- KU Leuven Campus Groep T (sustainable engineering, transport and mobility: e-vehicles, solar vehicles, biobased composite structures, etc.);
- KU Leuven (engineering dynamics, noise and vibration research, thermal and fluid technologies, etc.);
- Thomas More Campus De Nayer (alternative drivetrains).
Moreover, several of Flanders’ universities and university colleges have set up collaborative automotive research centers, such as:
In Flanders, your automotive firm is in good company. For starters, the vast majority of European and international automotive federations have their headquarters in Belgium and Flanders as region. These include ACEA, CLEPA, EARPA, FIGIEFA, EUROBAT, JAMA, EUCAR, EGVI, EAIVT, EATS, ETRMA and ETRTO.
What’s more, in Flanders, your automotive business can rely on a strong and motivated workforce that’s not just one of the world’s most productive but also multitalented and multilingual as well as highly trained and educated.
Some of this local talent has made it to the top of the international automotive design scene, working for leading brands such as Alfa Romeo, Ferrari, Ford, Audi, Volkswagen, Ford, Lotus Cars, Renault, Mitsubishi and more. Just think of world-famous automotive designers like Lowie Vermeersch, Dirk Van Braeckel, Pierre Leclerq, Steven Crijns, Thomas Bigwood and Luc Donckerwolke.
It should therefore come as no surprise that many of the world’s main automotive players operate production, logistics and/or R&D facilities in Flanders, including Volvo, Audi, DAF, VanHool, VDL, Fuel Link, Toyota, Hyundai, Honda, Mazda, etc. What’s more, these flagship firms are active alongside cutting-edge suppliers such as Continental, Bosch, Bombardier, Tremec, Dana, Tenneco, Bosal, Brose, Kautex, Plastal, Pullmaflex, etc.
Flanders is situated right in the middle between Europe’s main motor vehicle production sites: a central position from which your automotive business can benefit greatly in terms of logistics, distribution and more. Flanders’ ports in particular play a crucial part in automotive logistics in Europe and the world:
- The Port of Zeebrugge is the world’s largest hub for handling finished vehicles based on deep-sea roll-on/roll-off volumes. The port doesn’t just grant access to a well-oiled and finely tuned network of RoRo terminals, vehicle processing centers, equipment processing centers, car deck storage, railway-connected terminals and automotive transport firms. It also offers a broad range of value-added services such as pre-delivery inspection, carwash, (de)waxing, painting, repairs and more.
- The Port of Antwerp, Europe’s second-largest seaport, has numerous multipurpose as well as dedicated RoRo terminals. In addition, its vehicle processing centers offer a wide variety of services, including remarketing, repairs, waxing, washing, etc. Interesting fact: the port is considered a market leader in the export of second-hand cars to West-Africa.
- North Sea Port Ghent is home to an interconnected automotive cluster of car and truck assembly firms, car distributers, producers, suppliers and more – not to mention Volvo Car’s largest assembly plant, Volvo Trucks’ biggest assembly factory and Honda’s European distribution center.
Case in point: ICO makes Zeebrugge an e-car hub
Already the world’s largest port for the shipment of light vehicles, the Port of Zeebrugge (Flanders) has become a key hub for e-cars as well. Thanks to International Car Operators (ICO), a Japanese leader in car transshipment, the port is fully equipped to import electric cars into Europe. “In addition to growing our volumes, our focus is on creating a green terminal,” emphasizes ICO Managing Director Marc Adriansens.
In the short term, one-third of the cars passing through the port are expected to be electric. To charge the e-cars arriving at the port, a large number of electrical loading stations is required. In addition to the solar panels already in place, ICO installed an onshore wind farm, the largest of its kind in Flanders, to provide the necessary power.
When deciding to establish activities or headquarters in Flanders, your automotive company can reap the rewards of:
- government subsidies and support for investments in R&D and innovation, strategic transformation, ecological efforts, growth and other domains.
- tax incentives to fund a broad range of business activities.
- fiscal options to help you cut labor costs.
Flanders offers access to several tax incentives that are particularly relevant to research-intensive sectors like the automotive industry. Examples include:
- the innovation income deduction – up to 85% of a company’s net innovation income can be exempt from corporate tax.
- the R&D investment deduction – 13.5% of the investment value (at once) or 20.5% of the annual depreciation (staggered).
- the R&D payroll tax exemption – 80% of the withholding tax on professional income for researchers and academic personnel.
Some labor incentives and measures available in Flanders are particularly interesting for automotive players. Think of:
- Temporary economic unemployment – employers who cannot employ their workers on a normal basis for economic reasons do not have to pay wages for unemployment days. The Belgian Federal Employment Agency gives employees pay for those days of inactivity.
- Fiscal advantages for night or shift work – employers are excused from paying part of the advance tax payment that is deducted from their employees’ wages. This exemption amounts to 18% of the total taxable wages, including bonuses for working in shifts or night work.