Slovakia driven to be new auto-industry hub

Slovakia driven to be new auto-industry hub

Slovakia is rapidly becoming Europe's new center of automotive production thanks to major car manufacturers who last year pledged more than €1.7 billion in total investments for Slovakia's automotive industry. PSA Peugeot Citroen recently announced that it has all but put the finishing touches on its €700 million plant that will produce 300'000 cars per annum. South Korea's Kia Motors plans to establish a €1.1 billion plant, the company's first in Europe. Moreover, Volkswagen had bought a factory in Slovakia during the 1990's and then spent €1.2 billion in overhauling it. Slovakia's good infrastructure, access to Central European markets and transit possibilities to Western Europe, and lower labor costs and taxes than its neighbors make the country the ideal place for automotive manufacturers to set up shop. These same reasons also propelled Slovakia into fourth place among the 25 European Union (EU) member countries in terms of growth. The automobile industry's preference of Slovakia has led steel makers to make investments in the country. For instance, the US' largest steel producer, US Steel Corp, recently decided to make significant investments in the country. Slovakia is on course to become the world's largest car producer per capita in 2007, when it is projected the country will churn out 800'000 cars per annum. Further investments in the country by auto-parts makers and other steel makers are expected to be forthcoming.