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Auto powerhouse Slovakia eyes post-Brexit UK car industry

UK & Europe

Auto powerhouse Slovakia eyes post-Brexit UK car industry

Slovakia's prototype flying car. The former communist country is now a major player in the automotive industry.


Car industry giant Slovakia is showcasing itself as a global centre for auto assembly during its EU presidency amidst warnings by foreign car firms they may leave the UK in the event of a hard Brexit.

Slovakia is a global centre for auto assembly, a former Cold War powerhouse for tank-building turned home to major plants for South Korea’s Kia, Germany’s Volkswagen and France’s PSA.

Last week, Nissan’s CEO Carlos Ghosn held a meeting with UK Prime Minister Theresa May where he expressed fears for tariffs on cars in a post-Brexit EU. Nissan employs around 8,000 workers at its Sunderland plant, with a further 32,000 jobs dependent on it in the supply chain.

At an economic conference in Bratislava last week, organised by the ministries of economy and foreign affairs, and the Belgian think tank CIDIC, the country was showcasing itself as a centre for inward investment of the car assembly industry.

“In Slovakia, 25% of GDP comes directly from the automotive industry,” Dusan Jurik of the Ministry of Economy told investors.

According to Slovak officials, that is the highest GDP per capita figure in the world for the auto industry.

Slovakia is already home to KIA motors (an offshoot of South Korea’s Hyundai), and Volkswagen, and PSA/Citreon.

Some 80,000 people are directly employed by VW, Kia and PSA, with another 200,000 indirectly in work in the supply chain.

In December, before the Brexit referendum, UK manufacturer Jaguar Land Rover announced a €1.5bn investment plan to build a new plant in Nitra, western Slovakia, pushing out around 150,000 vehicles a year and employing 2,800 workers directly, with around five times that figure further down the line in the supply chain.

Slovakia owes its dominance – along with the Czech Republic – in the auto industry manufacturing and engineering sector to its Cold War history, when the former Czechoslovakia was a major centre for tanks and heavy armoured vehicles.

Now it is keen to push home that advantage as Nissan, and others, ponder the future of car manufacture in UK in the light of the Brexit threat to access to the free market, the customs union, and possible tariffs.

On display for potential investors in Slovakia was a new form of ‘aluminium foam’, developed under the supervision of Dr Frantisek Simancik, Research and Design Manager at the Institute of Materials and Machine Mechanics.

The foam – already used in Ferrari prototypes according to Dr Simancik – is lighter and cheaper than conventional aluminium, whilst being more resistant to vibration.

Even more futuristically, Bratislava is also home to prototypes of the ‘flying car’ concept, manufactured by Aeromobil.

On 2-3 November, Slovakia’s Minister of Economy will host a “Matchmaking” fair specifically focused on the automotive industry, with an emphasis on both its low-cost base (average monthly salaries in Slovakia are €883/month, with unemployment running at 11.5%) and on robotisation, digital technologies and ‘Industry 4.0’.

On the record, Slovak officials would only repeat the EU Commission position of ‘no negotiation without notification [of Article 50]’, but one diplomatic source described the Nissan situation in the UK as “interesting.”

Contacted by about the attractiveness of Slovakia as a possible location for any future Nissan UK investment, a company spokesman referred back to the official statement of last week, after CEO Carlos Ghosn met the UK Prime Minister.

That statement was fairly non-commital. Ghosn said, “Since Mrs May’s appointment, we have maintained a clear dialogue with the UK government during this challenging time.

“Following our productive meeting, I am confident the government will continue to ensure the UK remains a competitive place to do business.  I look forward to continued positive collaboration between Nissan and the UK government.”

May said, “This government is committed to creating and supporting the right conditions for the automotive industry to go from strength to strength in the UK, now and into the future.

“That’s why I was pleased to have met with Mr Ghosn today to discuss our shared belief that Britain remains an outward-looking, world-leading nation in which to do business. We will continue to work with Nissan as we develop the environment for competitiveness of the automotive industry here in the UK to ensure its success.”