Slovakia struggles to keep pace with rapidly transforming car sector

(EurActiv, 21 Jan 2021) In at least one global economic ranking, Slovakia consistently occupies first place – car production per capita. The sector accounts for 13% of Slovakia’s GDP, almost 50% of its industrial production, and 46% of the country’s exports, but this reliance is also fraught with risks, particularly in times of growing digitisation and green ambitions.

According to the Automotive Industry Association of the Slovak Republic, the sector employs 177,000 thousand people, with tens of thousands more jobs linked to the sector.

Slovakia is home to manufacturing plants for major companies including Volkswagen (Bratislava), Kia (Žilina), PSA Peugeot Citroën (Trnava), and Jaguar Range Rover (Nitra). In 2019, these manufacturers produced more than a million cars. In a country of 5.5 million people, that amounts to 202 cars per 1,000 inhabitants.

Despite these impressive numbers and the sector’s crucial role in the Slovak economy, there are downsides: the country’s reliance on the sector has left it vulnerable to shocks, and hamstrung the national leaders’ ability to make decisions that would impact these multinational companies or global marke.

The good kind of dependency?

The uptake in digitalisation and the adoption of the European Green Deal has seen the car industry undergo a seismic transformation. The pandemic has added to this, intensifying existing challenges and adding new ones.

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EurActiv, 21 Jan 2021: Slovakia struggles to keep pace with rapidly transforming car sector