In Slovakia, payment behaviour is generally good with a low number of non-payment notificiations, and this is expected to remain unchanged in the coming months.
- The Slovakian automotive sector is performing well as production increased 5% year-on-year in the period January 2015 - July 2015. Businesses´ profit margins are expected to increase futher in the coming months due to robust sales and improving efficiency in the production process. Input cost for steel and plastics have decreased.
- Jaguar Land Rover has announced a plan to build a new plant in Slovakia with a production capacity of 300,000 cars per year. This would further increase demand from local car parts suppliers.
- Depending on the level in the supply chain, payment duration in the automotive sector ranges between 30 days and 90 days. Payment behaviour is generally good with a low number of non-payment notificiations, and this is expected to remain unchanged in the coming months. The insolvency level in this industry is expected to remain low.
- Our underwriting stance remains open, given the low payment default and insolvency level in this industry. Market conditions are expected to remain favourable, with continued growth in car production and additional business opportunties for suppliers. However due to its high dependence on exports the Slovakian automotive sector remains highly susceptible to adverse developments in the global car market, e.g. a major slump of demand in China.