Experts say Slovakia has room for another carmaker

Slovakia is already home to manufacturing plants for three global carmakers, with construction of a fourth facility under way. Still, experts and market watchers say there is space for a fifth plant, especially in eastern or south-eastern Slovakia. While it would be perfect if such a plant manufactures, for example, electric cars, it is more probable that such a plant would manufacture utility vehicles.

But behind all the discussions about whether Slovakia could get a fifth carmaker or not, one is already actually growing here gradually. Bratislava-based AeroMobil is developing a flying car and has moved into new premises and is working to turn its prototype into a commercial product.

JLR is coming

“The arrival of the carmaker Jaguar Land Rover confirms the strategic place of Slovakia within the developed industrial states of the EU but also the whole world,” Juraj Sinay, president of the Automotive Industry Association (ZAP) told The Slovak Spectator.

Sinay pointed out that the British carmaker Jaguar Land Rover (JLR) would not only create a significant number of jobs but it also promises “application of the latest assembly technologies in the chain, where a car is at its end”.

Martin Jesný, analyst with the Slovak Automotive Institute, sees the impact of the new investment of JLR in several layers. While construction of the plant itself would mean a boost to the economy estimated by the National Bank of Slovakia as equal to some 0.4 percentage points of annual GDP through 2021, the fourth carmaker would also elevate the already high technological level of Slovakia’s automotive industry.

“JLR is known as a producer of high-end cars, technologically very demanding and with high quality and thus also expensive,” Jesný told The Slovak Spectator.

Market watchers also expect significant opportunities for development of the network of subcontractors, but note that the new plant will pose problems for the labour market.

Existing carmakers are already complaining about a shortage of qualified workers and are calling for changes in education to prepare people better for the labour market. The shortage will likely boost competition for existing skilled labour, thus pushing wages higher.

Building a new plant

In December 2015, JLR picked Slovakia over the UK, the United States, Mexico and Poland as the site for its new €1.5-billion plant. Slovakia is supporting the investment with state aid of €130 million as well as with preparation of premises for the plant and road construction. Its initial capacity should be 150,000 vehicles per year when it starts production in 2018. The company will also create roughly 2,800 direct jobs and thousands of indirect ones.