Slovakia Autos Report Q3 2011
- ID: 1841876
- June 2011
- Region: Slovakia
- 51 Pages
- Business Monitor International
Business Monitor International's Slovakia Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Slovakia's automotive industry.
Slovakia has failed to attract any new entrants of late. Indian and Chinese auto companies, which are relatively new in emerging Europe , appear more interested in the less saturated markets in the region. In March, Indian automaker Tata Motors acquired the Fabryka Samochodow Osobowych (FSO) car plant in Polish capital Warsaw. Serbia, meanwhile, attracted investments from China's Dongfeng Motor Corporation in November 2009 and South Korea's Yura Corporation in April 2010.
BMI believes that there are a number of factors which are holding back Slovakia. Most crucially, labour costs are much higher than in other parts of eastern European. Estimates from the US Bureau of Labor Statistics show that hourly wages in the Slovakian auto segment are higher than those in Poland, Serbia and Bulgaria. The workers at the Volkswagen plant in Bratislava have won a 4.6% pay rise. Automotive World has reported that the pay rises kicked in on April 1 2011 and will see a 4.6% average raise for workers. The deal agreed will also see wages increase by 3% in March 2012. The deal struck between the management at the unions representing workers at the plant will also see workers receive a one-off lump sum payment of EUR225 in September 2011.
The negotiations for the pay deal lasted just under two months, after the company began negotiations with an initial pay offer of 2%. Pay is steadily rising for auto workers in Slovakia, with Kia giving workers a 4.25% raise and workers at Peugeot winning a significantly larger 6.5% pay raise. Rising wages is likely to win industrial peace at Slovakian plants but higher wage growth could cut into the advantage Slovakia has over neighbours such as the Czech Republic or Germany in terms of labour costs.
Meanwhile, over EUR1bn (US$1.36bn) will be invested in Slovakia over a five year period by Volkswagen. The German auto giant has said that it intends to ramp up production of vehicles and parts in the country, to take advantage of lower labour costs and the existing infrastructure and organisational capability the company has already established in the country.
This is a significant investment as so far the firm has invested EUR1.7bn in the country over the previous two decades. The company currently has a vehicle plant near the capital of Bratislava, where the Touareg and Audi Q7 SUVs are produced. Additionally, Porsche components are produced at the plant. VW has already signed a deal with the Slovak Land Fund which will see a gearbox plant built on a 6.39 hectare large plot of land near the town of Martin within the coming four years. SHOW LESS READ MORE >
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Table: EU Action Plan For Electric Vehicles
Table: Europe – Top Automotive Suppliers Sales By Region (US$mn) 2010
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Production And Sales
Table: Slovakia Auto Production And Sales
Table: Slovakia Auto Trade
Macroeconomic Forecast Scenario
Table: Slovakia - Economic Activity
Manufacturers – Passenger Cars
PSA Peugeot Citroën
Country Snapshot: Slovakia Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2000-2012
How We Generate Our Industry Forecasts