The news announced earlier this year that Volkswagen (VW) was going to scrap 3,000 of the 15,000 jobs at its Slovakian plant came virtually out of the blue and sparked off speculation that the country’s authorities might have been so absorbed with labour reform during the ongoing election campaign that they have unintentionally made the domestic automotive sector less attractive for foreign investors.
Historically, VW was one of the pillars of the Slovak automotive industry, which in turn is hugely important for the national economy. Four carmakers – VW, PSA, Kia and Jaguar Land Rover (JLR) – together with their tier one and tier two suppliers generate 44% of the country’s total industrial production and 40% of its exports, worth €26 billion ($29.1 billion) per year. Both directly and indirectly, they also employ 250,000 people, according to Sario, the Slovak Investment and Trade Development Agency.
Yet the cost of producing vehicles in the country is on the increase and Slovakia risks losing out to some of its regional rivals. The government has now issued a new strategy which is intended to make Slovakia an attractive location for the assembly of electric vehicles.
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