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Analysts: Specialisation in Car Industry Involves Benefits and Drawbacks
Tuesday 04 May 2010 Zoom in | Print page
Bratislava, May 4 (TASR) - Slovakia's economy is focused on a very narrow production range dominated by automotive and mechanical engineering, but this has at least as many positives as negatives, TASR has learnt in interviews with analysts.
"For a small open economy such as Slovakia, a specialisation is more of a benefit. But the assembly of parts in line production doesn't have as much added value as R&D. This is why projects brought in by research centres should also be promoted," said Unicredit analyst David Derenik.
"Both have their pros and cons. A country that specialises in specific sectors can produce more efficiently than other countries. A whole host of sub-suppliers may flock into a specialising country, with downward pressure on manufacturing costs," said Derenik.
Slovenska Sporitelna savings bank analyst Michal Musak also believes that Slovakia has a competitive advantage in the automobile industry vis-a-vis other countries, in its wide range of suppliers, for example.
"This isn't to say, however, that the country shouldn't work towards improving the business environment in order to attract firms from other sectors," said Musak.
Both analysts concurred that the car industry was a major engine for Slovakia before the crisis and can perform in the same way once economies have recovered.
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