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BMI Industry View - Export Investment Boosts Production Outlook
BMI Industry View - Export Investment Boosts Production Outlook
BMI Industry View - Export Investment Boosts Production Outlook
Source :BMI
It is therefore not s urpris ing that international s uppliers and carmakers are rus hing to es tablis h
their pres ence in the s till immature market. As recently as Augus t 2013, Huanghai Auto, the bus
unit of Chines e vehicle and component manufacturer SG Automotive Group, expres s ed interes t
in acquiring the truck and s pecial purpos e vehicle factories of Zastava. Huanghai Auto is open to
a cooperation deal with Zas tava at the outs et, following which it is keen on participating in the
privatis ation of the Serbian company's Kamioni and Specijalna Vozila units .
Meanwhile, in June 2013, French tyre manufacturer Michelin revealed plans to build another
facility in the Serbian town of Pirot for EUR170mn (US$227.50mn). The facility will manufacture
pneumatic tyres , which will be exported to the European, African and As ian markets . The plant will
boos t Michelin's annual production in the country from the current 8mn tyres to 12mn tyres . With
s imilar intentions , US car parts manufacturer Cooper Standard has purchas ed land in Srems ka
Mitrovica to build a production facility by end-2013. Sealing s ys tems and plas tic and rubber car
parts will be manufactured at the facility, s cheduled to be launched in January 2014. Additionally,
Johnson Electric will build a factory for electric motors in the Serbian city of Ni as part of a
memorandum of unders tanding s igned between Serbia's Minis ter of Finance and Economy
Mladjan Dinkic and Johns on Electric Director for Europe Laurent Cardon. Johns on Electric will
inves t EUR15mn (US$19.51mn) during the firs t phas e of the project.
On the demand s ide, however, there is little room for optimis m. Unemployment, at 24.1% in April,
will remain an impediment to hous ehold s pending, as will be declining real net wages , at 1.2% in
April. We accordingly forecas t a further 8% y-o-y fall in autos s ales during 2013, which will be
followed by modes t 3% growth in 2014. Growth in vehicle demand in the medium and longer term
will als o s truggle to pick up pace, thanks to country's fas t-ageing population - with as much as
21.3% of people likely be aged over 60 by 2015 - and poor road infras tructure.
Owing to the s mall s ize of its autos indus try, Serbia ranks lowes t in BMI's Ris k-Reward Ratings for
the autos indus try in Europe, but a s lew of recent inves tments in the country's autos indus try particularly on the s upply s ide - pos e s ignificant ups ide ris ks to its s core. Serbia is particularly
appealing becaus e of its advantageous geographical pos ition, which allows eas y acces s to the