Production of Kia cars near Žilina, Slovakia (source: Courtesy of Kia Motors)
Having largely recovered from the effects of the Covid-19 pandemic, one of Slovakia’s most important industries has found itself battling new problems this year.
The automotive sector – which accounts for 12% of Slovak GDP and almost half of all the country’s exports – has continued to struggle with shortages of semiconductors and has now been hit by rocketing energy prices.
But while this has created problems for the industry, the year has also seen what analysts say is a positive development for the long-term future of the sector in Slovakia: the €1.2 billion investment in a brand-new plant in eastern Slovakia by Swedish concern Volvo.
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Experts say the location of the plant, its creation of jobs both directly and indirectly, and the specific cars to be produced there are good news.
“The plant will be located in the east of Slovakia, which will provide economic growth and jobs to the region, but especially help least developed areas which are often precisely in this part of Slovakia,” said Matej Horňák, economic analyst at Slovenská Sporiteľna bank.
“But it is also the carmaker’s focus on electric cars [being produced at the plant] - which are considered the future of transport, especially in the context of European efforts for ecological sustainability - which offer longer-term prospects to the Slovak automotive sector,” he added.
Fifth carmaker
The Volvo Cars automotive group announced in early July 2022 that Slovakia had been chosen as the site of a new €1.2 billion plant for the production of electric vehicles.
