Volkswagen AG’s Slovak unit recently said that the company plans to invest EUR1 billion ($1.4 billion) in Slovakia in the next five years to boost car and parts production. The Slovak unit CEO, Andreas Tostmann, said the focus will be on new production technologies and increasing car production in the Bratislava assembly plant and car-parts production in the Martin factory.
One of the biggest exporters and investors in Slovakia, VW has invested more than EUR1.7 billion in the country over the past 20 years.
An export-reliant country, Slovakia has introduced structural market reforms over the past decade and attracted billions of euros of foreign direct investment, helping to make it one of the European Union's fastest growing economies. The VW plant near Bratislava produces SUV models, the Volkswagen Touareg, parts of the Porsche Cayenne, and Audi Q7.
Production of a new small family car is expected to begin later in 2011. The car industry, including units of VW, PSA/Peugeot-Citroen and Kia Motors, is a key driver of the EUR63 billion Slovak economy, which is expected to grow by around 4 percent in 2010 after shrinking in 2009.
Vladimir Vano, a senior Volksbank analyst, said that Slovakia is a “unique” destination for foreign investment and also that it has a strong position in terms of car production per capita in Europe. VW made 106,000 cars in Slovakia in 2009, down from 188,000 units the previous year. [via autonews - sub. required]