Car industry in Slovakia lacks highways, education

The development of the automobile industry in Slovakia faces neck-bottled problems with the absence of highway connecting western regions with the East and the lacking of skilled labor force, the industrial experts stressed. Slovak Automobile Industry Association (ZAP) chair Jaroslav Holecek said there is a space even for a fourth automobile manufacturer in Slovakia after Volkswagen, Kia and PSA Peugeot-Citroen. "It's not under consideration at the moment, but there surely is adequate room for even two car producers in the area between Banska Bystrica, Zilina and eastern regions," he claimed. The most urgent challenge for companies is the completion of an expressway from Zilina in the North to eastern Slovakia, said Holecek. "I believe the course of the past decade has been wasted with meaningless and trivial quarreling between politicians. We've lost millions over decisions on whether or not the expressway would be profitable. Simply put, it should have been built a long time ago," he said, adding that 75 percent of the 300 subsuppliers for automobile industry are based in western Slovakia. The car industry has served the last 10 years as the workhorse of the Slovak economy, with a 43-percent share in total industrial production of the country. It also forms 26 percent of Slovak exports and provides direct employment to 60,000 people. "The proportion of the automotive industry in Slovakia's GDP stood at 6 percent last year. If we considered suppliers for car plants as well, then the figure would be even higher," said Slovenska Sporitelna bank analyst Martin Balaz. "The building of new capacities in car plants contributed significantly to economic growth especially last year," he added. The sector's influence doesn't end here, however. As UniCredit bank analyst Lubomir Korsnak pointed out, car plants are also somewhat of a driving force behind certain services such as transport, logistics and retail. "Suppliers for the automotive industry can also be found in other industrial sectors such as metallurgy and the production of rubber and plastics," said Korsnak. But there is a clear potential barrier for further development of the car industry in Slovakia - the education system. Holecek finds it paradoxical that although the unemployment rate is relatively high, companies face a lack of qualified workers. "Our prognosis shows an annual need for 42,000 new employees with high school education, 30,000 of whom would serve only to replace retiring workers. On the other hand, according to statistics, fewer than 5,000 high school graduates land jobs in their respective fields of study," he said In order to change this unfavorable state of affairs, a wholesome transformation of the school system is required. ZAP would like to see elements of a dual system introduced into the high school education system, one in which students would acquire more practical skills with companies in the industry. Slovakia also needs to have its research and development fields more oriented toward practice. "Science and innovations are not linked with the needs of our most important industry," Holecek said. ZAP hence proposes the creation of a center for strategic research and development, which would be specialised in the automobile industry and serve a number of companies. In 2013, Slovakia once again dominated the world chart in car production, with 181 automobiles produced per capita. Overall car production is still increasing its volume and 980,000 vehicles were manufactured in 2013 in the three Slovak assembly plants of Volkswagen, Kia and PSA Peugeot-Citroen.