The Slovenia Times

Going Strong



The massive role the automotive sector plays in Slovenia is self-evident: 213 companies generating EUR 3.4 billion in revenues in 2010, representing one tenth of the country's gross domestic product. This year too, the sector is registering good financial results.
Take car parts maker Cimos group. The company generated a net profit of EUR 4.1m for the first six months this year, which is 32-times more than in the same period last year. Sales revenues reached EUR 232.1m, a 14.4 percent increase on 2010. It's a similar story at car electronics maker Iskra Avtoelektrika, which recorded sales growth in the first six months of 2011. Turnover stood at almost EUR 100m at the core company and EUR 128.5m at the group, with profit at EUR 2m and EUR 3.5m respectively. To add one more example, Hella Saturnus Slovenija - the German-owned motor vehicles lights maker - has generated revenues of EUR 250m with EUR 21m in profit for the year 2010 to 2011 (ending in May).

Significant employer

With 14,600 employed, the sector is also one of Slovenia's biggest employers. The number of highly qualified people working directly and indirectly for car and truck manufacturers totals 147,000. Some 7,500 students are enrolled in undergraduate courses in mechanical, electrical and electronics engineering. The number of students in secondary schools for automotive and related industries is nearly 7,000.
"It is the quality of industrious and creative Slovenian people that ensures high professional and technical standards, process and financial controls, management systems and customer satisfaction," the Public Agency of the Republic of Slovenia for Entrepreneurship and Foreign Investment says on its website. "Knowledge of foreign languages and high interpersonal skills are an asset in an industry where only the best get to supply original equipment manufacturers."

Innovation is key

What else has been the secret to the automotive industry's success? According to Dušan Bušen, president of the Automotive Cluster of Slovenia, a dedication to innovation has been important.
"On average, Slovenia's automotive companies invest five percent of their turnover in development and 12 percent in new technologies," Bušen says. "That means we have been able to seize the opportunities offered by development trends in the automotive industry including hybridization and making vehicle technology electric so as to radically reduce the use of engines."
Hella Saturnus Slovenia is just one company seriously investing in research. Since June 2008, it has spent more than EUR 85m on development projects in Slovenia. And in January 2012 it will be opening its third competence centre in the country, focusing on developing single function lamps such as those used for licence plates, indictors and so on.
Hidria is another example of a Slovenian-based automotive firm dedicated to research. A global leader in the supply and development of a variety of automotive subsystems and components, the company has built its third research and development facility in Slovenia. Located in Spodnja Idrija, it is worth EUR 7.4 million and was co-financed from the European Regional Development Fund. Part of the technology park IN PRIME, Hidria's new facility focuses on efficient use of alternative energy sources and development of solutions for hybrid and electric vehicles.
Iskra Avtoelektrika also attributes its good financial results to its focus on development projects and investments aimed at securing further growth of the company. Chief executive Edvin Sever has pledged the company will continue to follow the same strategy in the future.
Other manufacturers are also aware of the impact innovations have on their business as they try to create added value. In TPV Novo Mesto, engineers have recently developed an innovative seat with a self-adapting headrest; Unior develops and manufactures hardware and various forgings; while Cimos and LTH Ulitkitry are out to beat the competition in the field of castings of various components.


The sector's innovation, as well as the crucial role it plays in the economy, is also evident from the number of awards garnered by companies in the field. This year, the prestigious Golden Gazelle award for fastest growing companies went to KLS Ljubno, a medium-sized manufacturing firm. The firm specialises in starter ring gears and mass rings for flywheels for the automotive industry, a niche in which it has a 40 percent market share in Europe and 12 percent globally. The company posted a net profit of EUR 1.2m on sales of EUR 24.8m last year, both figures marginally higher than in the year before.
Similarly, one of the FDI awards for 2011 was given to Goodyear Dunlop Sava Tyres. The Slovenian-based tyre-manufacturing company is a hub for markets of Central, Eastern and South-Eastern Europe and the jury described it as a role model of financial management. In 2010 it increased revenues and profit, both of which were high above the Slovenian average. In addition, the company invested EUR 11 million in technology development.
With the crisis in the financial and construction sectors grabbing the headlines, the success story of the automotive industry balances out the common view that everything in Slovenia is gloom and doom. Certainly when it comes to automotive industry, the country is on the right road to recovery.


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