As the largest car producer per capita in the world, according to estimates by the Automotive Industry Association of the Slovak Republic, Slovakia is leveraging its automotive prowess in a world of shortening supply chains and electrification. 

Robert Šimončič, general director of the Slovak Investment and Trade Development Agency (Sario), tells fDi how Slovakia plans to keep pace with the technological innovations that have swept through the automotive sector, and how it can stay competitive with its neighbours in Central and Eastern Europe. 

Advertisement

Q: Volkswagen pulled its multi-billion project in Turkey and pivoted to Slovakia last year. Why?

A: We were fighting for the Volkswagen project as early as 2018, due to its existing activities in our market. We were negotiating directly at its headquarters in Germany.

Although the decision was originally made in favour of Turkey, the investment was later cancelled. The reason for this was the pandemic, the need for austerity and the geopolitical situation in Turkey. For us at Sario, of course, that was great news. This investment is likely to attract other suppliers and investors, some of whom do not necessarily need to be close to production, and we can convince them to locate their operations in central or eastern Slovakia. 

Q: Do you expect to be the beneficiary of other nearshoring efforts in the automotive sector?

A: Allow me to mention one of the biggest projects we have secured: the Jaguar Land Rover (JLR) Group investment project in Slovakia from 2018 was of national importance, and several other projects — which have created many jobs, have followed on from it. That’s also why I do not consider JLR’s investment in Slovakia to be “closed”. Just a month ago, the group announced that it would hire 600 new employees. Another 300 will be created at its subcontractor, Syncreon, with the aim of meeting the high demand from foreign markets.

Q: Sario’s stated goal is to “help transform Slovakia into a technological and innovative hub”. How do you plan on achieving this?

A: Of course, automotive is a pillar of the Slovak economy, but it is important that we capture significant trends, such as electromobility or hydrogen technologies. A relatively large number of current ongoing projects relating to electromobility are projects with higher added value, and we need to capture this as a strong automotive player. I’m not just talking about the production of batteries, but about several other components that are related to the battery as an essential part of the electric car. We also see new trends in other segments. 

The issue of digitisation and technology transfer is important. Another big topic is medical and protective equipment. But we are also getting into new areas, such as gaming, aerospace and space industries, and we are working intensively on supporting and developing these. 

Q: How can Slovakia remain a competitive FDI destination in central Europe?

A: 2020 was also the year in which reforms began to be prepared and implemented, with the potential of increasing the competitiveness of the Slovak business and investment environment. This also applies to attracting technologically advanced investments, including direct investments in research and development.

One of the specific goals is the intention to build new public, fully prepared industrial parks, including one strategic park in the east of Slovakia. For example, the government approved the construction of a new park in the town of Rimavská Sobota. Investors have long preferred land to be in a state of absolute readiness to begin construction. The absence of such parks creates a major competitive disadvantage for Slovakia, compared with the countries in Central and Eastern Europe with which we most often compete for these strategic investments. 

Robert Šimončič is the general director of the Slovak Investment and Trade Agency (Sario)

Follow the links to find the full archive of the fDi Diaries and Virus Diaries series. 

If you are a member of the economic development and investment promotion community and would like to be part of the next iteration of the fDi Diaries series, please reach out to fDi@ft.com.