Business & Economy News Slovakia

Slovakia’s carmakers halt production amid fears of economic downturn

Bratislava, Slovakia – Slovakia’s four carmakers have now halted production after the last one standing, the Zilina-based Kia, announced a two-week suspension of its activities.

Kia halts car production in Slovak plant

“With full awareness and responsibility for the health of our employees and their families, and to prevent the coronavirus from spreading, Kia Motors Slovakia will temporarily halt its production for two weeks, starting on March 23”, the company said in a statement.

On the heels of this announcement, Continental also announced the suspension of its tyre production, officially due to a drop in orders linked to the global economic downturn provoked by the spread of the coronavirus, or Covid-19.

“Despite the measures adopted to minimize the risk of spreading the pandemic, global markets are responding with the drop in demand for our products”, company spokesperson Katarina Pavlisova said.

All four Slovak-based manufacturers shut down production

Kia was the last carmaker to announce it was shutting down its activities. After both Volkswagen and PSA Peugeot Citroën, respectively operating out of Bratislava and Trnava, stated they were putting on hold their car manufacturing plants for now, Jaguar Land Rover said on Wednesday it would also halt car production at its new plant in Nitra as of today it order to stem the spread of the viral outbreak.

With governments around the world struggling to contain the spread of coronavirus and scrambling to introduce aid packages to mitigate the economic impact of the pandemic, it remains impossible to assess the exact extent to which economies will be affected on the short and long terms.

The lifeblood of Slovakia’s economy

But the shutting down of Slovakia’s four carmakers will surely leave a deep mark. Known for being the world’s largest car producer per capita, Slovakia set a new production record last year: with more than 1.1 million cars manufactured in 2019, Slovakia produced a staggering ratio of 202 cars per 1,000 inhabitants.

Accounting for some 13% of the gross domestic product, more than 40% of industrial exports and nearly half of the country’s total industrial production, the automotive sector is undoubtingly the Slovak economy’s backbone and flagship industry. Whether or not it recovers quickly will be a strong indication of Slovakia’s level of economic resilience in the face of the viral outbreak.

Main photo credit: Kia Motors Slovakia Facebook page

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