SARIOSlovak Investmentand Trade Development Agency

AutomotiveSector in Slovakia

Bratislava

Prague

Berlin

London

Amsterdam

Rome

Paris

Warsaw

Munich

Madrid

Hamburg

Copenhagen

Stockholm

Budapest

Belgrade

100 km600 km1200 km1800 km

Athens

Zagreb

Istanbul

Ankara

Moscow

St. Petersburg

Bucharest

Lisbon

Marseilles

Vienna

Kiev

Gdansk

Sofia

Dublin

Edinburgh

Helsinki

Tunis

Cairo

Automotive Sector in Slovakia

This publication is designed to introduce Slovakia's dynamically growing automotive sector — facts and figures, sector strenghts and vision — to illustrate why Slovakia is an ideal location for doing business in this industry.

1 www.sario.sk

Overview of the Automotive Industry In Slovakia

2 www.sario.sk

The automotive industry has a strong tradition in Slovakia and became the most important sector and driving force of the Slovak economy. Over the past 20 years it has been an important source of foreign direct investment.

80,000 People employed directly by the 3 car producers — VW, PSA, Kia & Tier 1 suppliers

200,000People employed directly & indirectly by the automotive industry

43% Share of the automotive industry of the country's total industrial production

35%Share of the automotive industry of the total industrial export of Slovakia

17 BN €Volume of industrial export generated by the automotive industry

2.5 BN € Added value in the automotive industry

Highest labour productivityin the CEE region

Strategic location in Europe with great export potential

Cost-effective & skilled labour force

Political & economic stability

Wide supplier network in automotive sector

Growing R&D centers & innovation network

Euro currency as one of a few in CEE

Numerous technical schools & implementation of dual education

scheme

Fastest growing Eurozone member within the last 10 years

Attractive investment incentives for automotive industry

Well-developed infrastructure

1

4

2

3

5

6

8

7

9

10

11

80,000

200,000

43%

35%

17 BN €

2.5 BN €

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SR

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Indu

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Ass

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of th

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Rep

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(ZAP

SR

), To

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end

2015

GENERAL INfORMATIONTotal area: 49,035 km2

Population: 5.4 millionCapital city: BratislavaCurrency: EuroMember of: European Union, Eurozone, Schengen Area, OECD, WTO, NATOTime zone: GMT +1 hour

Top Reasons to Invest in Automotive

Industry in Slovakia

100 milion clients in radius

of 1000 km

Growing Car Production

3 www.sario.sk

The Slovak automotive industry experienced significant growth since 1992, which became even more rapid after the turn of the millennium.

Source: Automotive Industry Association of the Slovak Republic (ZAP SR)

Source: SARIO calculations based on data by Organisation Internationale desConstructeurs d’Automobiles

Car Production per 1000 Inhabitants

Taking into consideration the number of inhabitants, Slovakia is by far the global leader in car production per 1000 inhabitants.

Žilina

Bratislava

Košice

Trnava

Nitra

TrenčínBanskáBystrica

Prešov

Automotive Producers in Slovakia

4 www.sario.sk

Year of establishment: 1991Production (2014): 394,474Sales 2014: € 6.17 bnNumber of employees: 9,900Models: VW Touareg, Audi Q7, Volkswagen up!, Škoda Citigo, SEAT Mii, Porsche Cayenne, production of body in white for Bentley Bentayga

VOLKSWAGEN SLOVAKIA

Year of establishment 2004Production (2014): 323,000Sales 2014: € 4.59 bn2014: more than 493,000 produced enginesNumber of employees: 3,800Models: Kia cee’d, Kia cee’d_Sportswagon, Kia pro_cee’d, Kia Sportage, Kia Venga

Year of establishment: 2003Production 2014: 255,176 vehiclesSales 2014: € 2.08 bnNumber of employees: 3,500Models: Peugeot 208, Citroën C3 Picasso

Martin

Volkswagen Slovakiain Bratislava

Volkswagen Slovakia in Stupava (tool shop)

PSA Peugeot Citroën Slovakia in Trnava

Volkswagen Slovakia in Martin(gearboxes component production)

Kia Motors Slovakiain Žilina

Volkswagen Slovakia in Košice (preparation of VW

vehicles for the Russian market)

KIA MOTORS SLOVAKIA

PSA PEuGEOT CITROëN SLOVAKIA

Car manufacturer

in Slovakia with its own engine

production

The only plant in the

world producing 6 brands under

one roof

Kia's first and only factory

in Europe

The most profitable plant in

the PSA group

+17% average annual car production

growth for the last 5 years

SK

178

CZ KR DE JP SI BE ES CA UK FR

218 3492005

2009

2013

2007

2011

2015 F

2006

2010

2014

2008

2012

295 380

571 071

575 776

463 140

561 933

639 763

926 555

987 718

971 160

> 980 000

118

81

69 65 5742 40

2523 23

Car Production in Slovakia

Nowadays Slovakia belongs to the 20 biggest car producers in the World and produces more cars than Italy and Poland combined. It is expected to hit the annual benchmark of 1 mil. cars produced by the end of 2015.

The Slovak automotive sector gradually grew to

a global scale

Source: Volkswagen Slovakia, Kia Motors Slovakia, PSA Peugeot Citroen Slovakia

Stupava

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Automotive Suppliers in Slovakia

Not only the three established automotive producers make the core of the Slovak automotive industry but also a high–quality supplier network which operates close to the automotive plants. Tier–1–2 suppliers export their products to plants abroad as well.

Source: SARIO, Online Matchmaking Fair for Automotive Slovakia, GLOBAL Slovakia, 2015

TRENčíN

Ružomberok

BANSKáBySTRICA

ŽILINA

LiptovskýMikuláš

TRNAVA

BRATISLAVA

PREšOV

KOšICE

Poprad

NITRA

Komárno

Spišská Nová Ves

Kežmarok

Bardejov

Trebišov

Michalovce

Humenné Snina

StaráĽubovňa

DolnýKubin

Čadca

Bytča

PovažskáBystrica

Rimavská Sobota

Lučenec

Veľký Krtíš

Brezno

Nové Zámky

Prievidza

Martin

Skalica

DunajskáStreda

Rožňava

Senica

Piešťany Topoľčany

Partizánske

Bánovce n. Bebravou

Púchov

Zlaté Moravce

Žiar n. Hronom

Zvolen

Hlohovec

Malacky

Senec

Galanta

Šaľa

Sereď

Nové Meston. Váhom

Pezinok

Dubnican. Váhom

Levice

Tier 1 SupplierTier 2 Supplier

Revúca

300+ and still growing

300+ AuTOMOTIVE SuPPLIERSMore than 300 production plants in supplying automotiveindustry operate in Slovakia and the market still offers vastbusiness opportunities for expansions as well as establishmentof new production units. The majority of suppliers is located inthe western part of the country, especially along the highway D1from Bratislava to Žilina and highway R1 from Trnava toBanska Bystrica.

Tier 1 Suppliers in the Slovak Automotive Industry

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INTERIOR MODuLES, DASHBOARDSClamason, Daejung, Faurecia, Eurostyle Systems, Visteon Interiors, Hanil E-Hwa, IAC Group, KOAM, LPH Vranov, Synothec, Lear, SAS Automotive, Grupo Antolin, Treves, Eissmann, Z Industries, CRW Slovakia, Bourbon Automotive plastics, agna Exteriors and Interiors, Magneti Marelli

TExTILE, COVERS, LEATHEREissmann Automotive, ADTOOL, HOWE, IAC Group, Jobelsa, Heiland Sinoc Automotive, Automotive group SK, Treves, Trim Leader

SEATSJohnson Controls, Faurecia, DURA Automotive, LEAR

WIRING HARNESSES & ELECTRONIC COMPONENTSMOKI, Delphi, Leoni, Se Bornetze, CALEARO, SEWS, Yazaki, Kromber-Schubert, Johramont, YURA Elatec, F&P Production, Konfektia – E, CRT Electronics, DongYang, E&P, PANASONIC Industrial devices, Molex, Mkem, SIX EMS, Služba Nitra, MTA

ENGINE, ENGINE PARTS & COMPONENTS Hyundai Mobis, Pankl, Miba Sinter, Nemak, Ford Getrag, MAR SK, Hriňovské strojárne, ZF Honeywell Turbo, CCN Group, Magneti Marelli, EUROPALT, Volkswagen Martin, Miba Steeltec, ZWL Slovakia

STEERING WHEELSAdtool, Magna

MIRRORSMagna

AIR-CONDITIONING HALLA Visteon, DELPHI

MODuL fRONT ENDHBPO, MOBIS

SHOCK ABSORBERS Plastic Omnium, MOBIS, Rehau, Matador

SPRINGSC.E.P. Scherdel. PFS, Subtil Slovakia

BATTERIESAkutrade, BINDER

BEARINGSKINEX, GGB, PSL, Ina Kysuce/Skalica, MAHLE, ZVL Auto

ExTERIOR LIGHTS OSRAM, SEC, RKW, CEMMTHOME HELLA Front Lighting, HELLA Signal Lighting

TyRES, BALANCE WEIGHTSContinental Matador Rubber, Continental Matador Truck Tires, Rotobalance, Bekaert

SuSPENSIONSDonghee

DOOR SySTEMS & MODuLESBROSE, PHA Slovakia, Dura Automotive, Bourbon Automotive Plastics, Pyeong Hwa Automotive, Slovakian Door Company, U – Shin, Dongwon

SEALS AND SILENTBLOCS & OTHER RuBBER COMPONENTSALDOBEC, CIKATXO, COBA Automotive, DONGIL RUBBER BELT, Elastomer Solutions, Eldisy, MIKON, Rubena, SaarGummi, Vegum, SaarGummi, Contitech, Boge Elastmetal, Rubena

DRIVELINE, MECHANICAL OPERATIONSKüster, GAMMA, Kongsberg Automotive

BRAKES, BRAKE SySTEMS, DAMPERSFragokov , Continental Automotive Systems, Europalt, FTE Automotive, HUHN PressTech, Nobel Automotive, Ti-Hanil, VAP, TI Automotive

PLASTIC COMPONENTSIAC Group, POLYTEC Fremach Slovakia, HTP, Thermoplastik

ExHAuST SySTEMSTAJCO, SEJONG

BODy AND BODy STAMPINGS ArcelorMittal Tailored Blanks, COMAX TT, Autotest Bratislava, Benteler, Matador, Švec a Spol, US Steel Košice, Donghee, TOWER Automotive, Bekaert

fuEL TANKS & SySTEMSInergy Automotive systems, DONGHEE, Martinrea, Nobel Automotive, Coavis, Oerlikon

MODuL REAR END MOBIS

ANTENNAS2J, Calearo

CABRIO SySTEMSDONGHEE, Matador Webasto Edscha Cabrio, INALFA Roof Systems, INTEVA Products

WINDOWS & GLASSDURA Automotive, Plkington, RF

Source: Automotive Industry Association of the Slovak Republic (ZAP SR)

40 Largest Suppliers in the Automotive Sector

9 www.sario.sk

COMPANy NAME

Continental Matador Rubber

Mobis Slovakia

Johnson Controls International

Faurecia Slovakia

INA Skalica

Yura Corporation Slovakia

Magneti Marelli Slovakia

Continental Matador Truck Tiers

SAS Automotive

INA Kysuce

Johnson Controls Lučenec

Železiarne Podbrezová

Continental Automotive Systems Slovakia

Hella Slovakia Front-Lighting

ArcelorMittal Gonvarri SSC Slovakia

Sungwoo Hitech Slovakia

Emerson

Inteva Products Slovakia

ZF Slovakia

Halla Visteon Slovakia

COuNTRy Of ORIGIN

South Korea

Germany

USA

Germany

France

Germany

Germany

Germany

South Korea

USA

South Korea

Italy

Slovakia

Germany

USA

Germany

Netherlands

Luxembourg

Germany

South Korea

LOCALITy

Gbeľany

Púchov

Bratislava

Púchov

Bratislava

Bratislava

Skalica

Kysucké Nové Mesto

Lednické Rovne

Lučenec

Ilava

Kechnec

Podbrezová

Zvolen

Nové Meston. Váhom

Kočovce

Lozorno

Senica

Trnava

Žilina

SALES REVENuETHS. EuR (2014)

1 135 821

792 017

633 341

572 569

528 031

495 637

448 815

447 996

275 147

267 342

257 716

120 702

240 211

228 519

208 248

201 395

199 373

194 315

192 411

186 282

NuMBER Of EMPLOyEES (2014)

1 703

2 612

3 150

1 187

1 970

476

4 689

4 059

2 505

749

495

425

3 229

904

1 328

821

561

101

2 138

693

10 www.sario.sk

COMPANy NAME

U-Shin Slovakia

Hanil E – HWA automotive Slovakia

Plastic Omnium Auto Exteriors

Leoni Slovakia

Hella Slovakia Signal-Lighting

HBPO Slovakia

Iljin Slovakia

ZKW Slovakia

Lear Corporation Seating Slovakia

Brose Bratislava

Donghee Slovakia

Inergy Automotive Systems Slovakia

Matador Automotive Vráble

Yazaki Wiring Technologies Slovakia

Boge Elastmetall Slovakia

RF

Tower Automotive

SE Bordnetze - Slovakia

Trim Leader

Osram

COuNTRy Of ORIGIN

South Korea

Japan

France

Austria

Germany

USA

Germany

Germany

Germany

South Korea

Germany

South Korea

France

Slovakia

USA

Japan

Japan

China

USA

Turkey

LOCALITy

Dubnica n. Váhom

Košice

Lozorno

Krušovce

Trenčín

Prešov

Bánovcen. Bebravou

Lozorno

Lozorno

Strečno

Nové Zámky

Pravenec

Lozorno

Vráble

Malacky

Michalovce

Nitra

Trnava

Košťany n. Turcom

Malacky

SALES REVENuETHS. EuR (2014)

176 440

174 476

161 814

155 997

153 850

150 286

148 768

141 572

139 517

137 553

132 572

132 152

132 113

131 262

123 971

114 930

96 277

93 971

91 546

83 894

NuMBER Of EMPLOyEES (2014)

450

1 813

640

1 141

2 163

1 100

1 173

358

130

452

1 262

312

181

685

540

4 591

1 213

635

1 263

602

Source: Trend Top 2015, Global Slovakia 2015, SARIO

11 www.sario.sk

Qualified and Productive Labour force

Due to high and steadily increasing productivity in the Slovak automotive sector, the production in this industry is not categorized as low cost anymore. Nevertheless, it remains cost–competitive on the regional as well as the European level. The Slovak labour force is known for its flexibility, excellent qualification and high productivity.

Technical Education in

SlovakiaThanks to Slovak universities with a technical background

companies can find many suitable engineers for R&D jobs.

5 Technical universities

100+ Technical Vocational Secondary

Schools

30 Technical faculties

43 254Students in technical fields

58 117Students in technical fields

13 917Graduates in technical fields

16 051 Graduates in technical fields

90 Companies already

cooperate with 40 vocational schools across Slovakia

Source: Institute of Education Information and Prognosis of Slovakia for the Academic

Year 2014/2015, State Vocational Training Institute

12 www.sario.sk

Growing R&D & InnovationNetwork

More and more subcontractors move their R&D divisions to Slovakia due to the growing potential of the Slovak market. Decision to relocate and establish R&D capacities results not only in cost saving, but also contributes to company's flexibility to become more responsive to clients' needs. As well as they benefit from the available pool of highly qualified engineers and experts.

Success Stories in Automotive R&D

JOHNSON CONTROLSPart of the global R&D

network for seat systems

LEONIDevelopment of

car cable systems

ZKW SLOVAKIAInnovation of lighting

systems

CONTINENTAL AuTOMOTIVE Development of

brake calipers

DuAL EDuCATION COMEBACKSlovakia renews the tradition of dual education — students receive theoretical education at schools and practical skills at companies. Since 2015 the Slovak government implemented a new framework bringing the companies, which adopt the scheme, advantages of ready and qualified labour force and possibility to apply a tax relief.

AVERAGE GROSS MONTHLy SALARySelected Positions in the Automotive Sector (supplier network)

Institute of Materials & Machine

Mechanics

Applied research institute within the Slovak Academy of Sciences.

AeroMobil

A unique prototype of a flying car is being developed also in Slovakia by AeroMobil R&D.

The Aeromobil R&D was supported by the Slovak

government with state aid.

CEIT

Focus on innovative solutions and complex research projects in

cooperation with industry.

Production Operator/ Electronic Equipment Assembler

Lacquerer/Painter

Production Supervisor

Quality Controller

Welder/Metal cutter

Technician

West WestCentral CentralEast East

Bratislava region is excluded and employer's contributions (35.2%) is not included.Source: SARIO calculations based on data provided by Grafton Recruitment Slovakia s.r.o., 2015

600 €

725 €

800 €

665 €

900 €

1 200 €

565 €

675 €

740 €

625 €

875 €

1 125 €

605 €

700 €

775 €

700 €

900 €

1 200 €

13 www.sario.sk

The primary role of the investment incentives is to motivate investors to place their new projects in regions with higher unemployment. The positive impact of a new investment shall be proved by jobs creation, improved chances for the graduates to get a job, as well as by creation of new entrepreneurial opportunities for local companies.

Investment Incentives

25%

35%

35%

Bratislava region is excluded

ELIGIBLE PROJECTSThe Act on Investment Aid divides the projects which may be supported into four categories:• Industry• Technology Centers• Shared Services Centers• Tourism

MAxIMAL REGIONAL INTENSITIES Of INVESTMENT AID IN SLOVAKIA

TECHNOLOGy CENTERS• Minimum investment of 500 000 EUR on the fixed assets in all regions• At least 250 000 EUR must be covered by own equity• The company must employ at least 70% of employees having university education• Minimum 30 newly created jobs

ELIGIBLE COSTS• Costs of land acquisition• Costs of buildings acquisition and

construction• Costs of new technological equipment

and machinery acquisition• Intangible long-term assets — licences,

patents, etc.

fORMS Of INVESTMENT INCENTIVES• Contribution for the creation new jobs• Transfer of the state/municipality

property to the investor for the discounted price

• Cash grant• Tax relief

SE

SA MY NM

TN

IL

PUPB

BY

CA

KM

ZA

MT RK

DK

NO

TS

LMPP

KK

MAPK

SCBA

PN

TT HC

TO

BN

PE

PD

TRBB

BR

DTPT

LC

VKKA

BS

ZVZH

ZCZM

NR

GASA

NZ

KN

DS

LV

RS

RARV

SN

LE

SB

SL BJ

PO

GL

KSKE

VT

TV

MISO

SV

SK

SP ML

HE

14 www.sario.sk

ALL OuR SERVICES ARE fREE

Of CHARGE

• Information on foreign territories• Customized search for foreign partners• On-line database of business opportunities• Export Training Centre• Subcontracting assistance

SARIO Profile

INVESTMENT SERVICES

fOREIGN TRADE SERVICES

INNOVATION SuPPORT

SERVICES FOR POTENTIAL INVESTORS

IF YOU ARE LOOKING FOR

SERVICES FOR ExPORTERS

SERVICES FOR ESTABLISHED INVESTORS

• Investment environment overview• Assistance with investment projects implementation• Starting a business consultancy• Sector and regional analyses• Investment incentives consultancy• Site location and suitable real estate consultancy

• Slovak supplier or subcontractor• Information about Slovak export/trade environment• Sourcing opportunities• Forming a joint venture, production cooperation or other forms of partnership

with a Slovak partner

• Identification of local suppliers, service providers• Assistance with expansion preparation and execution• Relocation assistance, work/stay permits• Support of innovation and R&D activities• Social networking

Number of SARIO Investment Projects from

2002 — 2014

Number of SARIOInvestment Projects in

Automotive sector from2002 — 2014

2014 Global Best to Invest 2013Selection Site magazine

Our Award

415

140

• Support activities for development and popularization of Slovak innovations and R&D environment

• Establishment of relations with domestic and foreign well–established innovative companies

• Interconnection of Slovak R&D capacities with industrial production and investors' needs in order to transfer leading innovative technology processes closer to production praxis

• Encouragement to foreign investors to bring investments with substantial R&D components to the SR

• Ecosystem analysis of local investment opportunities as well as domestic and foreign investors in order to support acquisitions and joint ventures projects

• Specific information from the field, in order to obtain capital and foreign markets penetration

Slovak Investment and Trade Development Agency (SARIO) is a governmental investment and trade promotion agency of the Slovak Republic. The agency was established in 2001 and it operates under the Ministry of Economy of the SR.

INDuSTRy• Minimum investment amount/share of new machinery: 10 mil. EUR, 5 mil EUR, 3 mil. EUR (SMEs 5 mil. EUR, 2.5 mil. EUR,

1.5 mil EUR) /60%/50%/40%• Minimum 40 newly created jobs• Expansion includes minimum increase in the production volume

or turnover by at least 15%

for SMEs plus 10 to 20%

SARIO I Slovak Investment and Trade Development AgencyTrnavská cesta 100 I 821 01 Bratislava I Slovakia

Copyright © 2015 SARIOThe information in this publication needs to be in every case double–checked to ensure that it is up to date.Photo sources: Volkswagen Slovakia, Kia Slovensko, Dreamstime.com, 123RF.com

ISBN 978–80–89786–31–2

GPS +48° 9' 52.77", +17° 9' 20.27"

invest@sario.sk I trade@sario.sk I www.sario.sk

SARIO IS yOuR ONE STOP SHOP fOR INVESTMENT & TRADE IN SLOVAKIA. TALK TO uS TODAy!

AuTOMOTIVE INDuSTRy ASSOCIATION Of THE SLOVAK REPuBLIC (ZAP SR)Secretariat Bojnická 3, 831 04 BratislavaT: +421 2 4364 2235 – 6sekretariat@zapsr.skwww.zapsr.sk

CONTENT ADVISOR

PuBLISHERSlovak Investmentand Trade Development AgencyTrnavská cesta 100821 01 BratislavaT: +421 2 58 260 100F: +421 2 58 260 109marketing@sario.skwww.sario.sk

GRAPHIC DESIGNSlovak Investmentand Trade Development AgencyTrnavská cesta 100821 01 BratislavaT: +421 2 58 260 100F: +421 2 58 260 109marketing@sario.skwww.sario.sk

AuTHORSlovak Investmentand Trade Development AgencyTrnavská cesta 100821 01 BratislavaT: +421 2 58 260 100F: +421 2 58 260 109marketing@sario.skwww.sario.sk