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Automotive Industry I Automotive industry AUTOMOTIVE INDUSTRY THE AEROSPACE INDUSTRY I www.sario.sk 1 I Automotive industry Automotive industry in Slovakia Automobile industry is a key industrial and economic sector in many of the Central and Eastern European countries. The auto industry has been an important source of foreign direct investment for this region for the past 20 years. Car producers have sought to take advantage of well-educated and highly productive labour force with relatively low wages and advanced infrastructure base that closely links these economies to the core of Europe as well as Slovakia‘s strategic position for export to the East. Slovakia has become an important global automotive center, producing the highest number of cars per capita in the world, especially thanks to the presence of three world-known car manufacturers: Volkswagen (Bratislava); PSA Peugeot Citroën (Trnava) and KIA Motors (Žilina) as well as the major global automotive suppliers. The development of the automotive industry in Slovakia and integration into the important global automotive centres began in the early 1990s when the German company Volkswagen AG decided to start the car production near Bratislava. This important milestone helped to develop the economy after the end of markets of the former “Eastern Bloc” and the shutdown of armaments production in Slovakia. The creation of a supply chain started hand in hand with the arrival of Volkswagen, and thus further investments into the automotive industry rose in the supply sector. Slovakia had started a new path of development of industrial production, above all in the sectors of automotive and engineering. The implementation of the second important wave of investments into the automotive industry took place in years 2003-2005 thanks to the arrival of other two world-known automotive companies: PSA Peugeot Citroen and KIA Motors, which built their plants in Trnava (PSA) and Žilina (KIA). Car production in Slovakia increased so significantly after the implementation of production lines, that Slovakia became one of the 20 biggest car producers in the world. In 2011, the production in the Slovak production and automotive assembly plants reached 639,763 passenger cars, which rose by 15% in comparison with 2010, i.e. 83,822 cars were produced more. Slovakia is the world largest producer of cars per capita with production of 119 cars per 1000 inhabitants. In the country with just more than 5 million inhabitants was produced more passenger cars than for example in Italy and half of the entire production of the United Kingdom, while the population of each of these countries exceeds 60 million citizens. Car production in Slovakia 2012 925000 2011 639763 2010 556941 2009 461340 2008 575776 2007 571071 2006 295391 2005 218349 2004 223542 2003 281347 2002 225718 2001 182003 2000 181783 1999 126831 1998 125856 1997 41852 Source: Automotive - 100industry 000 association 200 of000 the Slovak 300 Republic 000 + www.oica.net400 000 500 000 600 000 700 000 800 000 900 000 1 000 000 I www.sario.sk 2 I Automotive industry The estimates of the Slovak carmakers for 2012 is the production of 925 000 cars, which means the increase of annual production by 45%. Volkswagen factory plans to double its production of cars to more than 400-thousand units and reached full capacity. Its current production consists of SUVs (56%) and small town cars New Small Family (44%). Kia Slovakia plans to produce 285 000 and PSA 240 000 vehicles. Even if the ambitious plans do not fully materialize, the volume of produced cars will be the highest in the history of the country and will strengthen its position as automotive leader in per capita terms. In comparison, data of neighbouring countries in car production in 2011 are as follows: 1,191,968 Czech Republic, 211,218 Hungary, 722,285 Poland, 130,353 Austria, 97,587 Ukraine. The overall number of cars produced globally was 59,946,698 in 2011. (Source: www.oica.net) The automotive industry is the key industry and driving force behind the development of the Slovak economy. Its sales of Eur 17 bn represented 27 % of the total sales in the industry in 2011. Sales in car production (in mil. €) 16,985 20 13,454 13,903 15 10,248 10 5 0 2008 2009 2010 2011 Source: Automotive industry association of the Slovak Republic, Slovak Statistic Office The sector also contributes significantly to the total exports of Slovakia in the amount of 20%. All three established automotive producers are listed among the most important exporters. The number of employees working in the automotive sector, directly or indirectly, was about 72 thousand in 2011, which represents approximately 14% share of the total employment in Slovak industry. This year’s expectation is an increase to 74 thousand employees. Number of employees in automotive industry 76865 74000 69800 80000 66875 68000 72000 70000 57376 54680 55000 60000 50214 50000 40000 30000 20000 10000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Automotive industry association of the Slovak Republic In comparison, in 2002 there were 50 ths employees working in the automotive industry and in 1993 there were only 22 ths employees. I www.sario.sk 3 I Automotive industry PSA Peugeot Citroën Slovakia Established in: 2003 Production capacity: 300,000 vehicles /year Production 2011: 252 000 vehicles (2010: 186 150 vehicles) Sales 2011: € 1.642 bn Export 2011: 99% Models: Peugeot 208, Citroen C3 Picasso Number of employees 2011: 2,953 Plant of the PSA group is located in Trnava. Kia Motors Slovakia Established in: 2004 – first production plant of KIA vehicles in Europe Production capacity: 300,000 vehicles/year Production 2011: 360 000 vehicles (2010: 229 505 vehicles) Export 2011: 99% Models: Kia Sportage, Kia Venga, Kia cee´d Number of employees 2011: 3158 KIA plant is situated in Žilina together with motor production. Volkswagen Slovakia Established in: 1992 Production capacity: 400,000 vehicles /year Production 2011: 210 000 vehicles (2010: 144 510 vehicles) Export 2011: 99% Models: Volkswagen Touareg and Hybrid version, AUDI Q7 and Porsche Cayenne body-in-white, Volkswagen up!, ŠKODA Citigo, SEAT Mii Number of employees 2011: 8400 Volkswagen Slovakia plants are situated in the following localities: Bratislava (assembly plant), Martin (production plant of components) and Košice (preparation of VW vehicles for the Russian market) I www.sario.sk 4 I Automotive industry Automotive suppliers in Slovakia Not only the three established automotive companies make the core of the Slovak automotive industry, but also a high-quality supply chain companies, which operate close to the automotive plants. Supply chains represented by a wide range of suppliers Tier-1-3, also supply products to plants abroad, have been built in Slovakia. The combination of three different cultures of car producers operating in Slovakia, the proximity of other automotive plants in Central Europe, three different main groups of suppliers has created a stable structure consisting of various types of suppliers divided not only according to the degree (e.g Tier-1, Tier-2), but also according to functionality and specialization (e.g. technology suppliers, engineering and construction services suppliers, systemic suppliers with own R&D, cluster initiative, etc.). Currently, in Slovakia operate 274 production plants supplying automotive industry, of which 202 is located in the western part of the country especially along the highway D1 from Bratislava to Žilina and highway R1 from Trnava to Banska Bystrica. Source: Automotive industry association of the Slovak Republic (AIA SR), 2011 Suppliers increased amounts of production from 2002, while 2009 was influenced by the economic crisis. Supplies of car components in mil.EUR 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Automotive industry association of the Slovak Republic (AIA SR), 2010 The supply sector thanks to foreign investors is building up a modern visage with the elements of the latest technologies in production, new culture, networks, development of innovative activities, etc.. Among the key suppliers in the supply sector are listed Continental, Johnson Controls, INA, Mobis, Magneti Marelli, Getrag Ford, Valeo, ZF, ArvinMeritor, Visteon, Faurecia, Lear and many others. I www.sario.sk 5 I Automotive industry Structure of the supply network in Slovakia Car manufacturers Tier-1 System suppliers With their own established production or assembly and JIT capacities (seat systems, interior systems, gearboxes) + local engineering and development centres (e. g.. JohnsonControls International) Suppliers of the chain Tier-2 Suppliers of the chain Tier-3 With their own established local production or (Suppliers of parts and components, assembly and JIT capacities (Suppliers of unprocessed material such as metal modules or components) or with their own parts, plastics, aluminum parts) established development (e.g. HBPO, Brose) Integrated suppliers Small engineering Consulting services of engineering companies, university (Project management, services science departments, TQM, production systems, (e.g. EDAG, Car research institutes of SAS optimisation.) (e.g.. IPA Slovakia) Technology) (specialized services, design, Rapid Prototyping, etc.) Suppliers of Clusters Technology suppliers software services (e.g.: Automotive cluster – West (automation, robotics, (e.g. Technodat CAE Slovakia, Plastic cluster and etc.) Systems) others) Local research-development institutes I www.sario.sk 6 I Automotive
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