Slovakia’s automotive industry in transition. Logistics as a driver of competitiveness

Slovakia is one of the most industrialised economies in Europe. Manufacturing accounts for over 30% of the country’s GDP, with the automotive sector as its main pillar, generating around 9.2% of GDP and nearly half of all industrial revenues. Major automotive manufacturers such as Volkswagen, Kia, Stellantis and Jaguar Land Rover already operate in Slovakia. In 2024, Slovak factories produced close to 1 million cars, giving the country a world-leading position in terms of vehicles manufactured per capita.

At the same time, this sector is now facing its greatest challenges. The automotive industry, long the driving force of the Slovak economy, is undergoing a profound transformation driven by including electrification and regulatory changes. For example, Volvo is currently building an electric vehicle factory near Košice with a production capacity of around 250,000 units per year. This growing focus on electric vehicles is transforming not only production structures, but also the logistics networks that support them.

Electrification is accelerating, and new safety, environmental and trade regulations are reshaping how supply chains operate. The shift from internal combustion to electric vehicles means fewer components, but far more specialised handling requirements. Battery systems and high-voltage components are classified as ADR goods, requiring strict safety compliance, adapted warehouse infrastructure and appropriately trained personnel. These changes also demand much tighter coordination across transport modes and precise synchronisation of inbound flows to maintain production continuity.

New horizons: Central Asia’s growing potential

Europe’s automotive sector is expected to be among those most affected by U.S. tariffs on European vehicles, while cost pressure and technological change are forcing a reorganisation of production. As up to 11% of Slovak-made vehicles were previously exported to the U.S., these measures may shift production and logistics priorities within Europe. The reduction of exports to the U.S. means that more volumes will need to be absorbed by the European market at the very moment when competition is intensifying, particularly from Chinese brands that also face tariff barriers in the U.S. and are redirecting their focus to Europe. This development has two dimensions: it means stronger competitive pressure for European producers, but it also opens new opportunities for the CEE region, including Slovakia, which has long-standing industrial know-how and a strategic location for serving regional distribution. At the same time, with both European and Asian manufacturers looking for alternative growth markets, Central Asia is emerging as a destination with long-term potential.

The region is vast and fast-developing: consumer purchasing power is rising, infrastructure is improving, and many European sectors, from home appliances and pharmaceuticals to fashion and construction, have already established a strong presence there. A key factor is also the rapid evolution of the local consumer. Markets such as Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan and Kyrgyzstan, together home to around 80 million people, are seeing a growing middle class that expects access to modern goods: fashionable clothing, the latest electronics and, crucially for the automotive, new and technologically advanced vehicles. Automotive could follow the path taken by other sectors, although the region remains demanding. China has become the number-one automotive player across the region, setting the competitive pace in both combustion and electric segments. SUUS is present on this market and observes these shifts from a close, operational perspective. For European manufacturers seeking diversification beyond the U.S. and saturated EU markets, Central Asia could become a natural extension of the continent’s industrial network.

Efficiency as a competitive advantage

To stay competitive, producers must keep production fast, flexible and robust. One of the solutions gaining importance in the automotive sector is VMI (Vendor Managed Inventory) – a model in which the logistics operator manages the import, inventory and storage of the client’s components, ensuring optimal deliveries while enabling deferred payment, streamlined customs and tax handling, and the transfer of ownership only at the moment the goods leave the warehouse. This approach reduces working capital needs, stabilises production and significantly improves supply continuity. At Rohlig SUUS Logistics, we already run VMI projects for automotive clients across Central and Eastern Europe, and we are seeing growing interest in this model as manufacturers look to shorten lead times, increase resilience and optimise costs across their supply chains. Alongside flexible warehousing and regionalisation of supply, VMI has become one of the key tools supporting competitive, responsive production in today’s demanding market.

In this environment manufacturers need logistics partners who offer true flexibility and strategic support. The ability to anticipate disruption, redesign flows and optimise inventories has become essential to keeping production stable and cost-effective. At Rohlig SUUS Logistics, we support clients through our proprietary Supply Chain Solutions (SCS) model – a tailor-made approach in which we design end-to-end logistics solutions built around the customer’s specific processes, production rhythm and strategic objectives. SCS integrates operational execution with solution engineering, allowing us to co-create supply chain models that combine resilience with efficiency. For global brands operating across multiple jurisdictions, a key element is also advanced customs management. SUUS provides Customs Control Tower solutions, centralising and coordinating customs processes across markets to ensure compliance, reduce administrative complexity and shorten clearance times – an increasingly important capability in a highly regulated trade environment.

On a demanding and rapidly evolving market, efficient production has become a strategic advantage. European manufacturers must navigate shifting demand and market reorganisation, but for Slovakia, with its industrial base and experience in serving regional production, this shift could mean new investment and distribution potential.