Made in Slovenia: Automotive Industry
For a small country Slovenia has an impressive tradition in the automotive industry, and it’s a tradition the sector now wants to enhance and reinforce. Doing so will involve adapting to a rapidly changing market with continually evolving demands.
Around Europe, there are many cars on the road which contain Slovenian components and know-how. Generally speaking, the companies which produce these components are valued by their customers. They usually excel with their knowledge, technology and innovation. The problem used to be that there weren’t as many customers as there could be, mainly because the automotive workforce here still costs significantly more than in some Eastern and Southern countries. However, the sector is tackling this issue successfully, with export figures speaking for themselves.
Slovenia’s automotive industry accounts for 21 percent of the country’s entire exports and, notably, 80 percent of what is produced by the industry is exported. When director of the Automotive Cluster of Slovenia Dušan Bušen gives a list of some of the sector’s clients, it reads like a who’s who of the automotive industry: “Audi, BMW, Citroen, Daimler, DAAF, Deutz, Ford, GM, Iveco, Jaguar, John Deere, MAN, Nissan, Opel, Peugeot, Renault, Saab, Škoda, Toyota, VW, Volvo and system suppliers: BNP, Remy, Continental, Johnson Controls, Perkins, Bosch, Brose, Magna, TRW, Valeo, Grammer, Faurecia, Denso, Aisin.”
Automotive components may be widely produced by Slovenian firms but since Cimos discontinued the assembly of Citroen cars in Koper, Revoz (owned by French company Renault) has become the country’s only car manufacturer. It is also Slovenia’s number one exporter with a 3.7 percent share of the global market. The cars produced by Revoz Novo Mesto are renowned for their uncompromising quality and it is one of the company’s most productive factories.
Closer to customers
Many international automotive companies locate their regional headquarters in Slovenia attracted by its proximity to the emerging regional markets and strong ties of local managers, engineers and other professionals with their counterparts in the Western Balkans.
But the sector is also expanding its production facilities to other countries. Slovenian industrial conglomerate Hidria opened a new production facility in the Chinese city of Changshu just last month. The company will be making diesel engine ignition systems for international corporations such as Great Wall, JMC, Shanghai Automotive, Cummins, Perkins and SAIC. The facility in the city located 100 kilometres north of Shanghai will employ 50 people by 2013 and enhance Hidria’s role on the global market, the company has said. So far, the firm has been supplying ignition systems for the Asian market from Slovenia, but now it will become more efficient in meeting the needs of its partners from China, Japan, South Korea, India, Malaysia and other Asian countries.
Speaking at the opening of the facility, chief executive Edvard Svetlik emphasised that the launch of production in China does not mean the company is relocating production: “but merely expanding the production of ignition systems, because Hidria’s customers, big international corporations with production facilities in China and the wider region, want local suppliers.”
Hidria currently has subsidiaries and offices in 20 countries around the world and sells its products in 80 countries. Every eighth diesel engine in the world has Hidria’s ignition system. Furthermore, the company ranks among top four producers of the systems in the world and is the first among them to launch production on the fast growing Chinese market.
Diversification is another common theme in the sector. Iskra Avtoelektrika, a maker of car electronics, has signed a four-year deal with Swiss company Busch Clean Air for the supply of electric motors used to power air pumps in exhaust purifiers. The component, which was developed in the company’s own research and development department, will be installed in the large diesel engines used to power heavy working and construction machinery. Volvo will be the first to install the system into its machinery equipped with Deutz diesel engines. Iskra Avtoelektrika hopes that the contract will help it enter this new and promising market segment which is expected to grow in the near future, as environmental requirements for car producers are stepped up.
The company has also recently has signed a EUR 240m deal with the US corporation Nexteer Automotive for the production of electric motors for power steering systems. Regular production under the 14-year contract is to start in mid-2013. With the contract, Iskra Avtoelektrika is becoming one of the leading global producers of motors for electric servo steering systems and expects considerable growth, the company says. The project will create 30 new jobs. The new production line will also comply with the company’s strategy of moving to green technology projects with high added value. According to the company, the electric motor made by Iskra Avtoelektrika has several advantages over regular motors, including less noise, increased lifespan, power and torque, while it is also more efficient and can save up to half a litre per 100 kilometres.
It may be a small country with only one car manufacturer but thanks to the massive number of its companies which produce car components, Slovenia is at the centre of the automotive industry. With those firms dedicated to diversification and innovation, it’s a position that the country should maintain for some time yet.
• Seats and seat components
• Components and materials for interior furnishing
• Car body parts
• Components for braking systems
• Mechanical and electric/electronic components for engines
• Exterior equipment and body lighting equipment
• Exhaust systems
• Engine and gearbox components
• Steering system components
• Drive components
• Other systems and components
• Manufacturing spot welding equipment
• Tooling for automotive industry
• Research, testing and other development activities
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