The Truth About Cars » Slovakia The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sat, 26 Jul 2014 14:51:02 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Slovakia PSA To Cut Labor Costs By Moving More Production Out Of France Fri, 23 May 2014 10:00:55 +0000 Citroen_C3_Exclusive

PSA will consolidate their small car production at a factory in Slovakia, as the struggling auto maker looks to cut labor costs and increase margins on small cars.

Reuters and Automotive News Europe report that the next-generation Citroen C3, the brand’s best-selling model, will be built in Slovakia, alongside the C3 Picasso minivan and the Peugeot 208.

Although the 208 and C3 are currently built at PSA’s Poissy plant as well as in Slovakia, moving them eastward would allow PSA to slash their hourly wage costs, from 57 euros an hour in France, down to 15.50 euros in Slovakia. Lowering labor costs is critical for PSA, as it struggles to regain profitability and reap greater margins on their small cars, which are both unprofitable and PSA’s most popular cars.

Closing any French plant will be fraught with difficulty. Complex labor laws and cultural factors will make closing a plant a political nightmare for PSA – but the economics of Europe’s car market can no longer sustain it.

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Bentley SUV, Imported From Bratislava Tue, 19 Mar 2013 15:26:24 +0000

As the Bentley SUV continues its inevitable march towards production, the latest news from Bentley itself is that the SUV won’t be built in its famed Crewe, England factory, but in Bratislava, Slovakia.

Apparently, VW’s board may demand that production take place in Bratsilava, where vehicles like the Volkswagen Touraeg are built. While Eastern European factories have long proven their ability to produce reliable, high-quality vehicles, it would be a huge departure for Bentley. And of course, it all comes down to money.

In a stunning expropriation of today’s environmentally friendly vernacular, Bentley chief Wolfgang Schreiber told Autocar

“We want to build sustainable cars that make money, but we have the components and the craftsmanship skills in Crewe.”

In this case, “sustainable” has nothing to do with polar bears or rainforests, but simply “making a lot of profit off of a Touraeg” by building it in a low-cost country. So how would VW get around this?

If the model were to be built in Bratislava, it would be the first Bentley sold without the famed ‘Made in Crewe, England’ plaque since some examples of the Flying Spur were built in Dresden in 2005/06. Instead, a ‘Designed in Crewe, England’ plaque would likely feature.

Rather than trot out the usual backward-looking tropes about “heritage” and “brand values”, let’s recognize that we’re in a different era, and any honor associated with the Bentley brand went out the window when they produced those ghastly Breitling Bentley watches. Instead, let’s applaud Bentley and the VW Group for the absolutely predatory cynicism involved here. They know they can make a very profitable vehicle (a high margin ultra-luxury SUV) even more profitable by building it in Slovakia, because the nouveau riche of the BRIC Countries – and America, for that matter, will not give a lick as to its country of origin. Bravo!

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Why A Bad Euro Is Good Sun, 09 Oct 2011 20:47:03 +0000

Everybody has heard  that Europe and the Euro are in trouble. So why does it take so long to save it? We’ll let you in on a little known secret. First, let’s go to Slovakia. The eurozone’s second poorest member quietly turned into an automotive powerhouse. Ever hear much of the Slovakian auto industry? You won’t. Global automakers such as Volkswagen, Peugeot, Kia have discreetly set up car plants in Slovakia. Parts makers followed. Wages are low – 780 euros a month on the average. Without anyone looking, Slovakia turned into the world’s top auto maker per capita. They want to keep it that way. And that’s why they don’t want to help Greece.

Everything in the EU must be decided unanimously. “One dissenting voice among the 17 countries that use the euro could wreck the latest plan,” writes Reuters.

“It’s a debate the rest of the world is following with concern. No strangers to privations and harsh economic reform, Slovaks are divided over whether their government should agree to increasing the powers of the fund set up to help Greece and other euro zone countries that have lived beyond their means.”

Officially, it’s a question whether a poor country like Slovakia should pay for countries like Greece, which borrowed too much and were fudging their books even before they joined the euro.

Unofficially, there is another matter. A low Euro is fuel for the European export machine. While the Japanese car industry is driven out of the country by its strong yen, a low euro makes exported BMWs, Mercedes or Audi even more attractive.

Germany exported itself out of the crisis in 2010 when the Euro was down to 1.20 to the dollar. When the Euro nearly hit $1.50 last May, exports started to slow down. The crisis in the Mediterranean countries brought the Euro down to more sedate levels, and order books are full. At the same time, imports from Japan, which suffers from a strong yen are being kept in check without anyone  raising a stink about level playing fields.

However, with all the trouble the euro supposedly is in, it still fetched a $1.34 on Friday. Which is relatively high for a currency that is supposedly falling apart  if you believe the news. A euro in trouble hides the fact that the dollar is weak. Whenever there are rumors about the Mediterranean mess being solved, the euro pops up like a spring that has been under pressure. Germany exports about half of the cars it makes at home. Or in places like Slovakia.

So the little known secret is that despite the chest pounding and the dramatic (but largely unsuccessful) salvage operations, the export dynamos in Europe’s north are not unhappy with a euro that is kept in check. If peace would break out on the euro front, the currency could easily zoom to $1.50 or higher.

It is not unwelcome when people in Slovakia ostensibly ask why a poor country should help bail out the Greek. It prevents people in Berlin, Wolfsburg and Stuttgart from openly discussing whether they should bail out the Greek and lose their jobs to a zooming Euro, or whether they should prolong the southern agony a little more. Riots in Athens are more palatable than riots in Berlin. Especially when you are in Berlin.

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