In cooperation with the Automotive Industry Association of the Slovak Republic and the Slovak Automotive Industry, PwC surveyed the current situation, key factors and the future expected development in the automotive supply segment in Slovakia.
Three quarters of the suppliers expect an increase in revenues and 50% of the companies achieved results better than in the previous year. Up to 87 % state that the biggest problem is the skilled staff shortage, 85% will increase wages, and one third of them do not employ employees from abroad. 40% of suppliers expect an increase in labour costs of 10 - 20% over the next three years. Only 8% of university graduates are considered to be well prepared for work. One third of suppliers expect to implement Industry 4.0 in their activities within the next five years.
Two thirds of suppliers achieved an increase in their revenues and one third of them recorded an increase in profitability of more than 10 %. Three fifths of them are using their capacity at over 80%.
The good times for the Slovak automotive industry are also reflected in the results of last year’s survey participants. 70% of them recorded year-to-year revenue growth for 2016 and 50% of these companies recorded double-figure growth. One quarter of all survey participants recorded 5% - 10% growth. 9% of suppliers recorded a drop in revenues by more than one tenth. PwC surveys show that more than a half of suppliers have achieved a continual growth in their revenues since the 2013 accounting year.
Three quarters expect a growth in revenues and the biggest concerns are regarding the lack of qualified workforce
Nearly three quarters of the surveyed companies also expect revenue growth in 2017. 50% of companies expect a double digit increase in revenues. Revenues are stable or less than 5% lower at 15% of companies in comparison with 2016. A fall in revenues of more than 5% is expected by less than 12% of the survey participants.
50% suppliers are missing out on business opportunities due to a lack of qualified staff, and one third of the companies do not plan to employ people from abroad, and will rely on their own training programmes.
More than a half of the surveyed companies stated that complications as regards recruiting skilled staff is already restricting the acceptance of new projects, as opposed to the previous year when 63% of survey participants stated such limitations.
89% of the suppliers expect an increase in salaries of up to 10 % in 2017
40% of companies expect a cumulated increase in average labour costs (wages + benefits) in the next three years of 10 to 20%, compared to 2016.
According to suppliers, only 8% of university students are well prepared for work as they do not have the required knowledge, experience or work habits.
According to the companies, a lack of readiness of university graduates is also a problem. The major shortcomings include, inter alia, a lack of experience and poor work attitudes and also a lack of knowledge and skills. Two companies stated that university graduates are completely unprepared for work at their companies. Insufficient language skills of the university graduates are also referred to as a drawback.
One-third of suppliers expect to implement Industry 4.0 in their activities within five years, and the most important areas will be robotics, production digitalization and in-depth data analysis
Robots are the most cited technology that will change companies over the next three to five years according to more than 93% of the survey participants. Robots were followed by the digitalisation of production and data mining and analysis including the application of cloud solutions. In this regard, cybersecurity is an issue mentioned by two thirds of the companies.
