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[email protected] www.seenews.com Southeast Europe The New Hot Destination of the Global Automotive Industry

By Tsvetan Ivanov, Business Analyst at SeeNews

Cover photo by Edouard Ki, Unsplash

Contents

Vehicle production 2

Romania – the face of the SEE automobile sector 2

Slovenia – the driver of growth 2

Serbia – in search of new markets 3

Bulgaria – who will be next? 3

Vehicle sales 3

Exports 4

Skoda ahead of local brands at the top in SEE 4

Automobile parts and components 4

Macedonia – booming automotive industry without automobiles 6

Alternative fuel vehicles – an emerging opportunity 6

Projects and investments 8

Trends 8 The automotive industry Total Vehicle Production (Units) in Southeast Europe 2017 2016 2015 (SEE)1 is represented by all 359,250 359,306 387,177 subsectors – manufacture 189,852 133,702 133,092 and distribution of passenger , light Serbia 79,912 80,320 83,630 commercial vehicles, SEE 629,014 573,328 603,899 buses and coaches, Source: OICA medium-sized and heavy- duty trucks and buses, Passenger Production (Units) alternative fuel vehicles 2018* 2017 2016 2015

(hybrids and electric cars), Romania 470,000 359,240 358,861 387,171 and automotive parts Slovenia 210,000 189,852 133,702 133,092 and components. It is Serbia 60,000 79,360 79,360 82,400 among the most rapidly expanding industries SEE 740,000 628,452 571,923 602,663 in the economies of all * Preliminary estimates. Source: OICA countries in the region of 9.7% in the region signifcantly ex- 57.1%. This is caused by the introduc- in terms of contribution ceed the European average of 3.1% and tion of the EcoSport model by Ford in the global average of 2.4%. This can be end-2017, the biggest investment in to the GDP, volume explained with the constantly increas- the automotive sector in the country in of production and ing demand for new cars in line with the last years, the sustainable growth of the overall sound economic growth in Dacia and by the crisis in Serbian Fiat job creation, as well SEE, paired with the preference of con- manufacture. sumers towards local brands, especially as one of the leading on the region’s largest market Roma- According to the Romanian Car Mak- sectors attracting FDI. nia. Passenger cars assembly in SEE is ers Association (ACAROM), Dacia pro- concentrated in three countries – Ro- duced a total of 335,262 vehicles in mania, Slovenia and Serbia. 2018, up from 313,833 units in 2017. In Vehicle production the period January – November 2018, Ford increased its production threefold Romania: The face of the year-on-year to 132,159 vehicles, al- Motor vehicles production in SEE re- most all of which under the EcoSport ported a sound growth in 2018, ac- SEE automobile sector SUV model. Thus, provisional data es- cording to preliminary data by the four timates for the output of automobile passenger car producers in the region The automotive industry in Romania industry in Romania in 2018 stands at – Romania’s and consists of the two major passenger more than 470,000, or a 35% annual , Slovenian and car producers, Dacia and Ford, and increase. FCA Srbija. Their combined annual out- several others with limited produc- put stands at more than 740,000 units tion numbers, supported by more than More than 70% of the vehicles manu- provisionally, or 18% more than the 600 original equipment manufacturers factured by Dacia in 2018 were Duster production in 2017. The rise is caused that supply both local plants and pro- – 236,921 units. The other three mod- primarily by the launch of a new mod- duction sites throughout Europe with els produced in the country were San- el by Ford Romania, which tripled the automotive components. The sector’s dero with 42,146 vehicles, Logan with company’s annual fgures. Automobile contribution was 13% of the GDP and 33,841 vehicles and Logan MCV with Dacia and Revoz also increased slightly provided jobs to more than 200,000 22,354 vehicles. their output, while FCA Srbija cut pro- employees in 2017. duction volumes by a quarter com- In 2018 Dacia sold 519,088 cars in the pared to 2017 and registered a decline The country is the undisputed leader EU in 2018, a 12.0% y/y increase. Ac- in output for second consecutive year. in automobile manufacture in SEE with cording to the French Automobile more than 470,000 vehicles produced Manufacturers Committee it exported In 2017 a total of 629,014 vehicles in 2018, a share of 63.5% in SEE’s mo- 140,326 vehicles to , up by 19.1% were manufactured in SEE, according tor vehicles output. In terms of pas- compared to 2017. ’s Federal to the International Organization of senger cars manufacture, the picture Transportation Authority reported that Motor Vehicle Manufacturers (OICA). is similar, as they constitute more than 71,746 vehicles under the Dacia brand This represented almost 3.0% of the 99% of the total vehicles manufacture were sold in Germany in 2018, up by total European and 0.6% of the glob- in the country. Romania’s dominance 14.5% y/y. al vehicles production, shares staying in the regional industry bounced back unchanged during the last three years. in 2018 to its 2016 level, while in 2017 Romania concentrates on production However, in 2017 annual growth rates Romania’s share in SEE had fallen to of low-budget cars and has gained

1 Southeast Europe (SEE) includes Albania, Bosnia and Herzegovina, , Croatia, Kosovo, Macedonia, Moldova, Montenegro, Romania, Serbia and Slovenia

2 Southeast Europe – the New Hot Destination of the Global Automotive Industry considerable share in two segments of market, with a small share exported to pared to 2017, which was the second the global market - customers in the Russia. highest annual growth rate in the EU. SEE region and other emerging mar- Slovenia was the second largest new kets with lower incomes, and custom- Provisional data by the company shows car market among the EU members in ers in Germany, France, and oth- that the output of the plant in 2018 was the region with 72,835 new cars regis- around 60,000 cars, compared to al- er western European countries with a tered in 2018 and a modest annual rise most 80,000 in 2017 and 83,630 in preference for low-budget cars. of 2.7%. Croatia was the third fastest 2016, which however is only half of the growing new passenger car market in annual capacity of Fiat’s plant. Serbia Europe with an annual growth rate of Slovenia: The driver was the only passenger cars producing 18.7%, which led to a total number of nation in SEE to not report an increase 59,856 registrations in 2018. Bulgaria of growth of its output compared to 2017. This also reported a sound increase, of 9.9% can be explained by the comparatively on the year, and new passenger cars Slovenia’s automotive industry gen- low demand on the domestic market, registrations reached 34,332 in 2018, erated 10% of the country’s GDP and where most of the Fiat 500L cars are compared to 31,244 in 2017. 12.5% of its exports of goods in 2017. sold – Serbia had the lowest annual Local passenger cars manufacturer growth in car sales among the major OICA reported that the total SEE mo- Revoz d.d. alone generated 3.7% of SEE national markets in 2017. tor vehicles market, excluding Mon- Slovenia’s GDP and 4.4% of its total ex- tenegro and Kosovo, stood at 401,612 Being a priority sector, the automotive ports in 2017. vehicles in 2017, an increase of 13.8%, industry can rely on the government’s compared to 2016. Revoz d.d. is Slovenia’s single passen- ambition to attract global strategic partners to establish new production ger cars manufacturer. Since 2004 the Out of the total vehicles sold in 2017, or revive suffering and non-functional company is owned by and pro- 333,463 were passenger cars. SEE was plants in the country. among the fastest growing new pas- duces models under the French brand senger car markets in the world, with – as of end-2018 they include Twingo, an annual growth rate of 14.0% in 2017 Forfour and Clio. It sells its out- Bulgaria: Who – far above the global average of 1.9% put both on the domestic market and will be next? and the European average of 3.7%. abroad, the top export destinations be- Driven by the sound macroeconom- ing France, with 38% of the exports in Automobile assembly in Bulgaria has a ic environment, all but one national 2017, Germany with 17% and with long tradition of unsuccessful attempts market in the region grew. Moldova 13%. by international car manufacturers, and Bosnia and Herzegovina were the such as Fiat and Renault. The latest leaders with rates exceeding 30% y/y, Preliminary estimates show production attempt collapsed at the beginning of while Serbia recorded the most modest fgures exceeding 210,000 vehicles 2017, when Chinese car maker Great annual growth of 9.8%. Only in Mace- in 2018, or a new double-digit annual Wall stopped operations at its plant in donia 11.3% less new cars were sold in growth. Sales revenue is expected to Lovech, northwestern Bulgaria, and comparison to 2016. stand at EUR 1.8 bln, up from EUR 1.6 fled for bankruptcy with many of its bln in 2017 and EUR 1.0 bln in 2016. already produced vehicles remaining The number of passenger cars owned Slovenia’s passenger cars produc- unsold. The Great Wall plant launched per 1,000 inhabitants in SEE remains tion had soared in 2017, which was its in 2012, with an annual production ca- far below the European average, which strongest year since 2010. A total of pacity of 50,000 units that was nev- implies a higher potential for future 189,852 units were manufactured, up er reached. The manufacturer’s main growth on the local markets. Accord- by 42.0% on the year. Thus Slovenia markets included Bulgaria, Romania, ing to Eurostat data, Slovenia scored accounted for 30.2% of the passenger Serbia and Macedonia. the highest in the region, with 531 cars in 2016. Bulgaria outpaced Slovenia in cars production in SEE, ranking second terms of growth rates throughout the behind Romania, and 1.0% of all cars Given the widening base of automotive 2013-2016 period and ranked second manufactured in Europe. component suppliers in the country and the formation of automotive clus- with 443 vehicles per 1,000 inhabi- ter, the automotive industry is declared tants. Croatia also reported consistent Serbia: In search a priority sector by the government. In growth and ranked third with 374 cars, February 2018 the government stated while Romania, partially because of of new markets its intention of attracting a global au- its size and weaker economic devel- tomobile manufacturer to carry out its opment in some areas of the country, Serbia’s automotive industry is consid- production activity in Bulgaria. The frst landed at fourth place in the region ered as the most important and per- talks will be held with car makers from with 261 vehicles. Four of the fve sta- spective industrial sector in the coun- Germany and the UK (BMW Group, tistical regions in the try. In 2017 it employed more than according to InvestBulgaria Agency), with the lowest number of passenger 40,000 workers, accounted for 14% followed by manufacturers from South cars per 1,000 inhabitants are located of the FDI and contributed 10% to the Korea and India. in Romania and they are also among country’s exports. The major driver of the regions with the lowest GDP per the sector is Fiat’s plant in Kragujevac, capita. All SEE countries researched by Vehicle sales Eurostat marked positive growth rates central Serbia, launched in 2008 where of car penetration in each of the last Fiat 500L is assembled. The Italian car According to ACEA (European Auto- four years. maker invested a total of EUR 980 mln mobile Manufacturers Association) new in the production, co-fnanced by the passenger car registrations in the four Romania remained the largest nation- Serbian state, according to local gov- EU-members in SEE stood at 297,942 al market in the region in terms of new ernment investment support agency units in 2018, up from 258,935 vehi- passenger cars sales in SEE in 2018. SIEPA. Another local manufacturer is cles in the previous year. Nearly half of The reported 130,919 new passenger Ikarbus, which produces buses and these sales were realized in Romania – cars sold are the highest fgure since coaches sold mainly on the domestic 130,919 cars, a 23.1% y/y increase com- the slump in 2009. However, the 2008

SeeNews – Business Intelligence for Southeast Europe 3 Total Vehicle Sales (Units) Total Vehicles Sales (Units) 180000

160000

140000

120000

100000

80000

60000

40000

20000

0 2011 2012 2013 2014 2015 2016 2017

Bulgaria Croatia Romania Slovenia Albania Bosnia and Herzegovina Macedonia Moldova Serbia

Source: OICA pre-crisis levels of 285,500 new cars have been minimal during the last de- pared to the previous year, Internation- are still out of reach. cade – less than 50% between the peak al Trade Centre (ITC) data shows. Thus and the post-crisis period 2009-2013, the region’s exports grew by a slight- As a country with local automobile as- while sales in all other SEE countries ly lower rate than the global exports, semblers, Romania’s new cars market contracted two or three times. In terms which increased by 5.0% on the year. is dominated by domestic brands. In of brands, was the leader SEE still had negligible, but stable share 2018 Dacia accounted for 28.2% of the on the Slovenian market with 11,817 in the global passenger cars exports – total sales, while the Romanian arm of new passenger cars sold in 2018, fol- 1.1% in 2017. the global manufacturer Ford ranked lowed by Renault with 10,511, Skoda ffth after Skoda, Renault and Volkswa- with 6,830 and Opel with 4,607 cars. The largest exporter of passenger mo- gen, according to the Romanian Au- The other brands to enter Top 10 in tor vehicles in 2017 in SEE was Roma- tomotive Manufacturers and Import- Slovenia were Fiat, Peugeot, Hyundai, nia with EUR 2.990 bln, or nearly half of ers Association (ACAROM). However, Citroen, KIA and Dacia, according to the region’s total exports of passenger the domestic market absorbed only a data from Slovenian Chamber of Com- vehicles. It was also the second fastest small share of the output of the local merce. growing among the three major players plants of Dacia and Ford – under 10%. in SEE with an annual rise of 4.1%. In the After the removal of the environmental The new passenger cars market in Bul- frst eleven months of 2018, provisional tax on used automobiles by the gov- garia is recovering at a fast pace in the data shows that Ford Romania tripled ernment in 2016 and the subsequent last years and in 2018 more than two its exports compared to the same peri- doubling of the registered imported times more cars were sold compared od of 2017 to 132,663 vehicles. second-hand cars in 2017 at the ex- to the bottom after-crisis 2010 – 34, pense of stagnating sales of new local 332 vehicles against 16,257 seven years In annual terms, Slovenia reported a automobiles, ACAROM reported a new ago, ACEA data shows. Generally, the 12.4% increase in exports to EUR 2.652 twist in the trends on both markets. The level of new passenger cars sales is bln. fading effect of the tax removal led to a an indicator of a country’s econom- decrease of 9.0% in second-hand reg- ic health and in Bulgaria the growth Serbia ranked third in SEE as a motor istrations, while new car sales grew by rate is among the fastest not only in vehicle exporter with a value of EUR impressive 23.1%. In terms of sales by SEE, but also in Europe – 9.9% y/y in 0.936 bln in 2016. It recorded the model in the frst 11 months of 2018, 2018. Although two times slower than sharpest drop in the region on the year Dacia occupied the top three spots in 2017, this growth rate remains above – by 5.3%. The downtrend persisted with Logan – 19,558 vehicles, Duster the European average. Data from the in 2017, Serbia being the only country – 12,029 vehicles and Sandero – 9,440 Ministry of Internal Affairs shows that in SEE with available data in ITC along vehicles. the most preferred brand in Bulgar- with Montenegro to drop in exports, ia in 2018 was Dacia with 3,666 new when it exported output worth EUR Despite being one of the least popu- vehicle registrations, followed by Re- 0.937 bln, a new annual decrease, by lated countries in SEE, Slovenia ranks nault with 3,423, Skoda with 3,235 and 15.5%. as the second largest market for new Toyota with 2,783. The other produc- passenger cars in the region after Ro- ers with more than 1,000 new vehicles mania. In 2018 the domestic sales registered in the country in 2018 were Skoda strengthens its amounted to 72,835 units, compared , Volkswagen, Peugeot, KIA, Ford to 70,892 in the previous year. On the and Citroen. positions on the top in SEE other hand, the annual growth rate was lower than the other SEE countries with The SEE new passenger cars market provided sales data for 2018, a conse- Exports in 2018 remained dominated by Euro- quence of the saturating local mar- pean manufacturers, led by Skoda and ket, which boasts the highest number SEE exports of passenger motor vehi- with particularly strong presence of lo- of cars per capita in SEE. As a whole, cles in value terms amounted to EUR cal brands. The Czech car maker was fluctuations on the Slovenian market 7.088 bln in 2017, or up by 4.6% com- the most popular brand in half of the

4 Southeast Europe – the New Hot Destination of the Global Automotive Industry Passenger Car Sales (Units) Passenger Car Sales (Units) 140,000

120,000

100,000

80,000

60,000

40,000

20,000

0 2011 2012 2013 2014 2015 2016 2017

Bulgaria Cr oatia Romania Slovenia Albania Bosnia and Herzegovina Macedonia Moldova Ser bia

Source: OICA countries in SEE – Serbia, Bosnia and well-developed IT and supporting in- faster than production, which is a sign Herzegovina, Macedonia and Kosovo, dustries. The geographical proximity to of the increasing competitiveness of while the local powerhouse Dacia ex- big manufacturers within SEE, as well Romanian auto component makers on pectedly occupied the top only in Ro- as in and , which the international markets. The country mania and Moldova. are among the European leaders in au- acts as an automotive industry hub in Skoda outperformed Volkswagen, Da- tomobile assembly, ensures compet- the region, with easy access to major cia, Toyota and Renault in terms of itive advantage in terms of low distri- markets such as , Rus- density and with Top 3 places in all SEE bution costs and just-in-time delivery. sia, Poland, Ukraine and Turkey. countries but Bulgaria, the Czech man- ufacturer substituted Volkswagen as International Trade Centre data shows Romania specialises in the manufac- the most equally distributed top brand in the region. that exports of parts and accessories ture of tyres, cables, conductors, plas- for motor vehicles has steadily grown tic and rubber components, bearings The big newcomer in the Top 3 rank- each year between 2013 and 2017 in and transmission components, elec- ings in 2018 was Toyota, which occu- most SEE countries, except Albania and tronics, batteries, safety systems and pied the top in Bulgaria, the second Moldova, and only for 2017 – Bosnia optical devices. spot in Moldova and the third in Mace- and Herzegovina. The average annu- donia. al growth rate in the region stood at More than 270 companies were active 18.9% in 2017. Macedonia and Monte- in the automotive components sector Automobile parts negro more than tripled the value of in Slovenia as of end-2016, employing and components their automotive components exports more than 16,000 people. More than within a year, while Croatia, Bulgar- 90% of the sector’s output was export- The automobile parts and components ia and Romania posted double-digit ed, with half of it going to assembly subsector is more widely represented growth rates. In 2017 Romania gener- plants in Germany to clients like Audi, in SEE than automobile production and ated automotive components exports BMW, Mercedes Benz, Volkswagen and assembly. A network of component of EUR 6.520 bln, or 80.4% of the total Ford. The rest was exported to France, suppliers for all major car manufactur- region’s exports in the sector. Slovenia Italy, Austria, the UK, the USA, Hungary, Mexico and Romania. ers in Europe has developed through- and Croatia followed with EUR 872.7 out SEE – Romania, Slovenia and Serbia mln and EUR 199.1 mln, respectively, The country specialises in the manu- are already established as leaders, but while Bulgaria reported exports of EUR facture of car body parts, steering sys- Bulgaria, Macedonia, Croatia, and even 110.1 mln. tem and drive components, seats and Moldova and Bosnia and Herzegovina covers, braking systems, exhaust sys- tems, engine and gearbox components have clusters of automotive compa- Romania has the largest in size and and electronic components. nies. importance automotive components subsector in SEE, consisting of more Serbia’s automotive components sub- The factors underlying the region’s de- than 600 suppliers. Its development is sector accounted for more than half velopment as a preferred destination boosted by the presence of major pas- of the total value of the automotive for multinational automotive compa- senger car assembly plants in the coun- industry’s output in 2015, according to the Serbian Business Registers Agency nies to locate their production sites are try. According to the Romanian Invest- and Serbian Development Agency. The the cost-competitive environment, ac- ment Agency, both production and most important product categories cess to a qualifed workforce with en- exports of components have doubled produced in Serbia include tyres, wir- gineering and technical skills, and the in value within fve years. Export grows ing harness, casted parts, plastic parts,

SeeNews – Business Intelligence for Southeast Europe 5 New Vehicle Registrations (Units) New vehicles registrations (units) 120,000

100,000

80,000

60,000

40,000

20,000

0 24,256 4,875 N/A N/A 28,216 4,321 N/A N/A 33,809 5,087 N/A N/A passenger cars LCV and buses LCV and buses LCV and buses passenger cars LCV and buses LCV and buses LCV and buses passenger cars LCV and buses LCV and buses LCV and buses under 3.5 between 3.5 over 16 tonnes under 3.5 between 3.5 over 16 tonnes under 3.5 between 3.5 over 16 tonnes tonnes and 16 tonnes tonnes and 16 tonnes tonnes and 16 tonnes 2015 2016 2017

Cr oatia Romania Slovenia Auxiliaire de l’Automobile Source: Association rubber hoses, seats and seat covers and expand their already existing activities carried out production activities in other body parts. in Bulgaria. The factors for the rapid the country, mainly for clients in Ger- growth, compared to the other coun- many and Serbia with a combined The components subsector in Serbia tries in SEE, are: comparatively late 40% share in Macedonia’s automotive is represented by more than 70 com- launch of the industry in Bulgaria and components exports panies, providing jobs to 40,000 em- low starting point lead to the higher ployees. Approximately 20% of the growth rate. Other factors include the workers are employed in entirely local presence of a developed IT sector in Alternative fuel vehicles – companies, while the rest work in au- the country, which enables the cre- an emerging opportunity tomotive components plants of global ation of highly innovative products and manufacturers, mainly from Germany, solutions in the automotive industry. South Korea, Italy, France, Slovenia and Electric automobiles still have very low More than half of the FDI in Bulgaria penetration in the region. As of end- the USA. A characteristic feature of Ser- in the last years are in the automotive bia’s car parts subsector is its extremely 2017, data from the Bulgarian Associ- sector. Since 2005, a total of EUR 400 ation of Car Manufacturers shows that uniform geographical allocation, which mln have been invested in 20 automo- covers all parts of the country, with 3,388 hybrids and 384 electric cars tive industry projects certifed under were registered. This represented a Kragujevac as a distinguished centre the Investment Promotion Act. with more than 10 suppliers headquar- combined share of less than 0.15% of tered around the Fiat plant. all vehicles on the Bulgarian roads for The prime location of the sector in alternative fuel cars. However, their Bulgaria is the Trakia Economic Zone number is rapidly growing and a third According to Automotive Cluster Bul- near in central southern Bul- garia and the Ministry of Economy, in of all hybrids (1,195) and electric cars garia, where more than 10 automotive 2017 the automotive components in- (106) in use were registered in 2017 parts suppliers have their production dustry in Bulgaria was represented by alone. This made a total share of 3.8% facilities. Other major locations are the 170 companies with more than 50,000 of all passenger car registrations in the capital, Sofa, and Ruse and Pleven in employees, which contributed 5.0% country, up from 2.1% a year earlier. northern Bulgaria, as well as the whole to Bulgaria’s GDP. The combined total The fgures in Slovenia and Romania, as region of southeastern Bulgaria. revenue of the companies in the sec- reported by France-based Association tor stood at EUR 2.5 bln, of which 90% Auxiliaire de l’Automobile, are slightly from exports to major international car Macedonia – booming lower – 2.9% and 2.1%, respectively. makers. In comparison, the average share of automotive industry hybrids and electric cars in the overall A survey by Automotive Cluster Bul- passenger car registrations in the Euro- garia and consultancies Colliers Inter- without automobiles pean Union stood at 5.6% in 2017 and national and PricewaterhouseCoopers 4.2% in 2016. The main reason for the Bulgaria in 2017 showed that 85% of Despite the lack of motor vehicles faster growth rate in SEE lies in the lat- the automotive components produc- assembly plants in Macedonia, the er entry of alternative fuel vehicles and ers operating in Bulgaria plan to expand automotive sector enjoys dynam- the ongoing removal of regulatory and their activities in the country. A positive ic development and growing impor- infrastructural obstacles as compared trend is that the share of suppliers with tance for the country’s economy. The with the rest of Europe, where the mar- own research and development activ- Automotive Cluster of Macedonia ket is closer to saturation. ities in Bulgaria grows constantly and points out catalytic converters, safety exceeded 40% in 2017. systems, seat belts, airbags, electron- Bulgaria was the country with the ic controllers and sensors, precision fastest annual growth of new electric The number of employees is expected engineered and plastic products and chargeable passenger cars in 2017 in to double in the next four years, given casting components as the prod- the region – more than eightfold com- the plans announced by internation- ucts in which the country specialises. pared to 2016. The jump was due to al automotive companies to enter or As of 2017, more than 50 companies the very low fgure in 2016, when only

6 Southeast Europe – the New Hot Destination of the Global Automotive Industry 13 new vehicles were registered. In the doubled in January – November 2018, SEE with three stations in Romania and frst nine months of 2018 the trend compared to the same period of 2017, Serbia each, and one station in Bulgar- persisted, according to local Ministry to 847 from 378 units. According to ia, Bosnia and Herzegovina, Macedonia of Internal Affairs – a total of 554 elec- the Slovenian Chamber of Commerce, and Moldova each. tric cars were in use compared to 276 2,161 new hybrid and electric charge- in September 2017. Slovenia and Ro- able vehicles were registered in the The role of governments is to provide mania remained by far the leading SEE country, compared to 1,502 in 2017. incentives, such as direct subsidies for markets in terms of new electric cars the purchase of electric vehicles, as registrations, although they registered The underdeveloped and partially lack- well as facilitate the access to elec- a more moderate growth – to 456 in ing infrastructure for electric vehicles tricity. As of 2017, in Serbia and other countries, charging stations are not 2017 from 198 in 2016 in Slovenia and in SEE, together with insufficient gov- allowed to sell electricity if the market to 188 from 74 in Romania, respective- ernment incentives, pose a problem is not liberalised. An important step by ly. for electric car transportation in the region. This can be relieved through governments is to equip the public ad- Unlike electric chargeable vehicles, hy- private sector initiatives, such as the ministration with electric vehicles. brids have reached signifcantly higher Green Balkanika project by Slovenia’s In an effort to facilitate the penetra- absolute sales in Romania, Slovenia and automotive technologies provider Hid- tion of alternative fuel vehicles, in 2017 Bulgaria, due to their better usability ria d.o.o. The latter was announced in Bulgaria’s Association of Car Manufac- given the inadequate electric charging 2016 and aims to equip the roads be- turers proposed a government subsi- infrastructure in SEE. In 2017 Romania tween Munich, Germany, and Istanbul, dy of EUR 5,000 for each new electric was the largest hybrid market in SEE Turkey, with charging stations, as well car and of EUR 2,500 for each plug-in with more than half of all newly regis- as to connect all countries in the West- hybrid vehicle. In addition, it was pro- tered hybrids in the region – 2,039, up ern Balkans with a road fully suitable for posed that the purchase of alternative from 1,089 a year ago. Slovenia was the alternative fuel vehicles by 2020. The fuel vehicles be relieved of value-add- fastest growing market, almost trebling project is co-fnanced by the European ed tax. its sales to 1,005 units, while hybrid Bank for Reconstruction and Develop- sales in Bulgaria jumped to 1,195 vehi- ment (EBRD) and the European Invest- In May 2017, a similar measure was ap- cles in 2017 from 580 in 2016. ment Bank (EIB) with the support of the proved by the Romanian government European Commission. – under the Rabla Plus programme, it In the frst 11 months of 2018, newly doubled the fnancial incentives for the registered hybrid vehicles were 3,169 Another major project in the region purchase of an electric chargeable ve- and reached 2.8% of the total new car is by US-based electric automobiles hicle to EUR 11,000, and provided an sales in Romania, up from 2.1% in 2017. manufacturer Tesla Inc., which plans incentive of up to EUR 1,450 for the The number of new electric chargeable to expand its network of supercharg- purchase of a non-plug-in hybrid ve- vehicles sold in Romania more than er electric vehicle charging stations in hicle.

Top 3 Most Popular Brands by Country in 2018

Slovenia 1. Volkswagen 2. Renault 3. Skoda Romania Moldova 1. Dacia 1. Dacia 2. Skoda 2. Toyota Serbia 3. Renault 3. Skoda 1. Skoda 2. Fiat Bosnia and 3. Volkswagen Herzegovina 1. Skoda 2. Volkswagen 3. Opel Kosovo 1. Skoda Bulgaria 2. Citroen 1. Toyota 3. Ford 2. Nissan 3. Renault Macedonia 1. Skoda 2. Volkswagen 3. Toyota

Source: http://ceauto.co.hu/

SeeNews – Business Intelligence for Southeast Europe 7 Projects and investments Trends

• In September 2018 Germany-based Leoni Grup invested EUR Automotive industry is among the most dynamic sectors in 32 mln in the construction of a plant for electric cables for SEE. Measured by the increase in combined revenues of all Mercedes Benz in Pleven, northern Bulgaria, which is to be ful- companies entering the SeeNews Top 100 annual ranking, ly operational by October 2019. the automobile sector shows development in the period • In November 2018 Volkswagen Group announced its plans to 2007 – 2017 unmatched by any other industry in the region. build a plant in Bulgaria, Romania or Turkey, which will start In 2017 the automobile companies featured in the ranking assembly of the Skoda Karoq and Seat Ateca models by 2022. reported combined total revenue of EUR 14.219 bln, more • The German automobile air conditioner components manu- than double that of 2006, when it stood at EUR 5.916 bln. In facturer Mahle announced its plans to increase the number of the period 2013 – 2017 the sector grew at a CAGR of 12.0%. employees in its Sofa-based subsidiary Behr-Hella Thermo- control by 50% in 2018. The automotive sector, and especially passenger car as- sembly, plays a leading role in the economies of Romania, • In January 2019 Romania’s subsidiary of German Daimler Slovenia and Serbia. Automotive companies will continue to Group, Star Assembly SRL, announced its plans to launch the production of a new type of gearbox for Mercedes-Benz pas- grow in importance – Romania’s Dacia is the largest com- senger cars in its plant in Sebes, western Romania. pany in terms of total revenue in 2016 not only in Romania, but in SEE as a whole. FCA Srbija, the company operating • In September 2018 Ford Romania started production of a new Ford Focus model, after in October 2017 Ford had launched the Fiat plant, is the third biggest Serbian company and the the manufacture of its model EcoSport in the Craiova factory country’s largest exporter, as is Revoz in Slovenia. In the oth- in southern Romania, in which it had invested EUR 200 mln. er SEE countries, most notably in Bulgaria and Macedonia, the sector represented by automotive component suppliers • In September 2016 Romanian car interior decorations supplier of Mercedes Benz and BMW Hib Rolem Trim invested, joint- is also among the fastest growing contributors to GDP. ly with the government of China’s Xiangshan County, USD The emphasis in the development of the region as an auto- 30 mln in the construction of a new plant in Brasov, which is motive hub lies on introducing the R&D activities of global planned to be fully operational by Q2 2019. players – an intention declared by the Bulgarian govern- • In 2018 Fiat Chrysler Automobiles Group announced that its ment and Automotive Cluster Bulgaria, and already execut- Serbian arm FCA Srbija planned to invest in the electrifcation ed by companies like Porsche and BMW in Romania. of the Fiat 500L model.

• Chinese company Yinlong expressed interest to take over local The big challenge for SEE automobile and component bus and trucks producer Ikarbus and invest EUR 30 mln in it. manufacturers is to fully use the potential of close partner- Serbia’s government has given the green light, but the nego- ship with the IT industry. It will result in automation and the tiations around the deal are in standstill as of 2017 due to the creation of innovative solutions in order to stay competitive high indebtedness of Yinlong. on the world automotive market. • In August 2018 Revoz d.d. announced the launch of produc- tion of a new generation model in the frst half of In a global context, the major trends ahead of the automo- 2019, which would be the frst model entirely assembled in the tive industry in SEE are the accelerating macroeconomic Slovenian plant. growth on the positive side, and the risk of some countries implementing protectionist measures on the negative. In • In February 2018 Slovenia’s ambassador in India revealed that the government was in preliminary talks with three Indian most SEE countries, including Romania, Serbia, Bulgaria and companies from the automotive sector for the establishment Macedonia, the automotive sector is set as a priority indus- of or assembly plants in Slovenia. try. Its development will be further facilitated through state incentives in the form of efforts to attract foreign investors, • In January 2017 Canada’s car and components manufacturer Magna announced its intention to invest EUR 1.240 bln in a investor-friendly tax measures, minimised bureaucracy, new passenger car assembly plant near Maribor, northeastern easy access to fnancing, and programmes for improve- Slovenia with an annual capacity of 126,900 vehicles. ment of workforce skills and qualifcation.

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