The automotive sector enjoys dynamic development and growing importance for the country’s economy. A stable government framework, cost-competitive environment, strong technical skill base, free trade access to Europe, and ever-increasing development of infrastructure have made North Macedonia a prime destination for investment. Additionally, the existence of a strong local supplier base and their ongoing development is creating opportunities for supply chain linkages and local company cooperation.
North Macedonia has a long history in the automotive sector, dating back to the Yugoslav period when the region’s factories began by supplying the Serbian automotive producer Zastava. From there, the manufacturing sector slowly became specialized, as several producers of automotive components began sprouting up around the country. Quality products being produced in these factories, in compliance with automotive standards TS 16949 and ISO 9001, assures that the production in the Macedonian automotive components sector is exported. North Macedonia is experiencing a surge in its automotive component sector, aided by clever government policy, location, and a cost-competitive market environment.
The country is particularly suitable as a location for the manufacture of high value to weight and labor-intensive products such as safety systems (seat belts, airbags), electronics (controllers, sensors), precision-engineered and plastic products, aluminum and zinc die-casting, and grey iron casting components.
Over the past years, our country has been growing into an embryonic automotive components hub, as well as into a bus manufacturing location.
North Macedonia has currently manufacturing capabilities, and growth options, in the following auto component systems:
In parallel to the nascent automotive components segments, North Macedonia has revamped its bus assembly capabilities over the past years with the entry of a major OEM European bus manufacturer from Belgium (VanHool).
The country offers a particularly cost-competitive operating environment for auto component manufacturing. The labor force is well educated, flexible, and has a strong work ethic. North Macedonia has a sustainable supply of young, highly skilled labor at a competitive cost. Labor within the region is very cost-competitive, lowering a firm’s overall costs. In February 2020 the average gross salary was 660 euros across all sectors, while the manufacturing sector was at 560 euros. This is amongst the lowest gross monthly salaries in the region.
These companies have a large global reach, exporting to Europe, Russia, Turkey, Africa and around the globe, encompassing a duty-free market of over 650 million customers resulting from three multilateral trade agreements (SAA with EU, EFTA with Switzerland, Norway, Iceland, and Liechtenstein, and CEFTA with the rest of the Western Balkans) and two bilateral agreements with Turkey and Ukraine. North Macedonia’s location allows it to deliver to many of these regions quickly, taking less than a day to Central and Eastern Europe and Turkey, and two days maximum to Western Europe.
Currently there are over 50 companies operating in North Macedonia, covering amongst other OEMs, seat belts and seat belts parts production, busses and coaches, various automotive and machine parts and railway vehicles and components. Companies like Johnson Matthey, Kromberg & Schubert, Amphenol Technology, Marquardt, Tab Mak, Joyson Safety Systems, Draxslmaier, Gentherm, Lear Corporation, Kostal, Adient, ARC Automotive, Lth Learnica, Adient Automotive, Aptiv, ODW Elektrik, Accomplast, “Ҫaǧatay Kablo, “Murat Ticaret”, Dura Automotive Systems, and many others, have set up large export-oriented production facilities in the country and several have already reinvested multiple times. Likewise, recent years have witnessed a number of successful smaller local and foreign ventures in this sector, creating opportunities for further development.
“I’ve been asked why the company invests in North Macedonia, instead in emerging countries such as India or China. Well, North Macedonia is one of the emerging centers. It has a history of connecting various worlds – the east and the west and Europe and America nowadays. I’m convinced that this investment will be successful”, said CEO of Vann Hool, Philip Van Hool.
“We are seeking qualified and trained personnel, and employees for simpler jobs, who want together to build and develop our facility in technologically sophisticated manufacturing plant. We are confident that we can find these people in North Macedonia and that together with them we can open a new chapter in the success story of our company that has lasted for nearly 90 years, “said CEO of Marquardt Group, Harald Marquardt.