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Miroslav Vraneš, DELL Serbia

IT Drives Initiative

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Sanja Jovanović, Wiener Städtische

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Aleksandar Mišković, Precise Casting Plant- LPO

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Nebojša Škuljec, Director, Merck Sharp & Dohme

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ASW Inženjering (Engineering)

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Igor Vijatov, Director of the Serbian Automotive Cluster

No Fleeing Of Automotive Industry Investors

Although the world automotive industry has been hit hard by Covid-19, we have no reason to believe that factories representing parts of large global supply chains will withdraw from Serbia

The entire world automotive industry is based on production chains. Large car factories previously sought to produce as many parts as possible at their own plants, but around 30 years ago they changed the working system and redirected the production of parts to suppliers. They did this in order to save money and increase the efficiency of their plants. Suppliers took on the responsibility for the production of parts, “just in time” deliveries and, in some cases, the development of products, sub-assemblies, as well as individual car assemblies.

In order to make additional savings, reduce car prices and fight for customers, the automotive industry and its supply chains became global. The whole world participates in the production of motor vehicle parts and there is constant competition between countries and factories to provide high-quality parts at the lowest possible prices.

Such a philosophy of production and doing business proved to be good in regular times, but in times of crisis, such as the crisis with Covid-19, problems have emerged in the sense that supply chains have been halted. An additional problem lies in the fact that the pandemic did not hit the whole world at the same time, so in some period production stopped and then continued, but when the crisis ended in some countries or regions it was just beginning in others, which made it even more difficult to establish a normal supply chain for vehicle factories.

The speed at which the car industry in Europe will recover depends greatly on the willingness and ability of citizens across Europe to buy new cars.

What is good is that, by all accounts, the crisis in Europe is coming to an end, car factories are returning to work, and – as they are dependent on their suppliers – they are also relaunching their suppliers’ productions of parts.

Serbia is a country where large factories producing motor vehicle parts arrived in the previous period, which employ a large number of people and have a contribution to GDP that has been growing from year to year. The standstill in the production of cars, primarily in Europe, and thus the standstill in the production of automobile parts in our country, will certainly impact on the Serbian economy. More accurate forecasts regarding the extent of the fall in production and sales of cars and car parts this year are really not easy to predict, and I think that in the future that will depend greatly on the willingness and ability of citizens across Europe to buy new cars.

I really don’t expect that the fleeing of investors from our country will follow. This was also confirmed to us by representatives of BME – Association Supply Chain Management, Procurement and Logistics, Germany – who used their recent online conference, entitled “SEE Automotive Conference 2020” and traditionally organised by the Serbian Automotive Cluster, to present their analysis that major car manufacturers are not expected to move towards changing their suppliers.

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Comment

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