The Slovenian subsidiary of the German group Mahle plans to lay off more than 600 workers by the end of 2025 as it streamlines production and moves part of it to lower-cost countries.

Announcing the news, Mahle Electric Drives Slovenija said the step was necessary due to weak demand on the European automotive market.

The company is planning to make 340 workers redundant due to "optimisation of organisational structure" to increase efficiency and another 270 due to relocation of production of alternators to Bosnia-Herzegovina and of e-compressors to Hungary.

The redundancies will affect its main location in Šempeter pri Gorici in the west of the country, where the company said would continue the efforts to make production sustainable and meeting the needs in the face of electrification of vehicles.

"We plan to invest in new production of system for electric vehicles particularly in the company in Šempeter," Mahle said in a press release on 10 October.

A drop in demand was recorded in virtually all of Mahle's markets, CEO of Mahle Electric Drives Slovenija Guntram Haas said.

"Based on these facts, we at Mahle Electric Drives Slovenia need to plan our business for the near future in a way that will strengthen our competitiveness, especially as the Mahle plant in Šempeter is central to future growth in electrification," the CEO was quoted as saying.

They are working to find socially acceptable solutions for employees who will be affected by these measures. "We will now approach the consultation process with employee representatives," Haas said.

Šempeter pri Gorici is the largest of the five Mahle Group plants in Slovenia. The company, which was created with the German Mahle takeover of Letrika in 2014, employs more than 2,000 people in Slovenia.

With around 1,700 employees, Šempeter is a central development and production hub for electric drive systems and mechatronics used in hybrid and electric vehicles, and electric bicycles. In recent years, Mahle has also started production of electric motors for new vehicles and electric bicycles in Šempeter.

Slovenia's automotive industry as a whole employs around 40,000 people in nearly 400 companies, generating almost 10% of the country's GDP. Germany being its main market, the woes of the German car makers are seen as a major concern.

In light of the major shifts and geostrategic shifts in the global automotive industry, the Economy Ministry, automotive suppliers, employer organisations and trade unions have agreed a set of priorities to adapt to the changed situation.

These range from improving production processes, to support for R&D for disruptive technologies and higher value-added products, and for development of new markets and worker skills, as well as measures such as a short-work scheme where fluctuation in demand occurs.