AUTOMOTIVE STUDY 2025 / Šaroch (ed.) et al.

4.4 Discussion and Conclusions Based on our analysis, which builds on our previous research (see, among others, Čižinská, 2022, Čižinská, Neset & Matějková, 2021, Čižinská & Krabec, 2020, Čižinská & Krabec, 2024, Čižinská & Neset, 2020a, 2020b, 2021 or Šaroch et al, 2021), it was found that in terms of nancial performance measured by EVA and its drivers, the V4 countries can be classi ed to some extent in line with the ndings of Pavlínek (2022). Pavlínek (ibid.) highlights the key importance of the German automotive sector for global production networks (GPNs) and its impact on other European countries. Zainuddin et al. (2021) nd that higher internationalization rates (measured by the ratio of foreign assets to total assets) have a negative e ect on ROE. is means that companies with more investments abroad do not automatically achieve higher returns on invested equity. is conclusion is consistent with our nding that the return on capital employed (ROCE) of German automotive companies was signi cantly below the ROCE of companies in the Czech Republic, Slovakia and Poland over the whole period under consideration. Pavlínek (ibid.) classi es the Czech Republic as an unstable semi-periphery, Poland as a stable periphery, while Slovakia and Hungary are unstable peripheries. Indeed, our ndings con rm that the Czech Republic positively di erentiates itself from other V4 countries and achieves higher levels of ROCE and EVA than rms in the German automotive industry and other V4 countries. However, in contrast with Pavlínek (ibid.), our ndings show that the performance of the Slovak automotive industry outperforms that of German companies and therefore not only Poland but also Slovakia could be considered as a stable periphery. e hierarchical clustering also shows that the clustering of Slovakia and Poland at a lower level re ects their greater similarity in ROCE, while the Czech Republic shows some divergence, although it still shares similar features with the cluster of SK and PL. Hungary is the least similar to the other V4 countries and performs the worst in the assessed indicators, which is consistent with its classi cation as an unstable periphery. In our analysis, we also looked at selected EVA drivers (invested capital turnover, operating pro t margin, after-tax cost of debt, unlevered cost of equity, leverage of invested capital, and investment dynamics) and their interrelationships. Similar research has been conducted by, for example, Reinhard and Abdi (2023), who examined the impact of the expense-to-sales ratio (a measure of cost intensity), total asset turnover (re ecting asset utilization e ciency), and debt-to-equity ratio (indicating nancial leverage) on the return on equity (ROE) of publicly traded companies in the automotive industry. e ndings of Reinhard and Abdi (2023) suggest that a higher cost-to sales ratio has a negative and signi cant impact on return on equity (ROE), as higher operating costs relative to revenue reduce pro tability. is is also supported by our ndings, as the operating pro t margin was found to be a statistically signi cant parameter of generated EVA in all countries considered. us, to increase value creation for automotive investors, controlling operating costs, optimizing production processes and portfolio structure, and implementing e cient pricing strategies are absolutely crucial.

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