4 min.

Ivan Mihailov: Bulgaria already manufactures parts for a whole car

Interview by Daniela Kazandjieva |

Ivan Mihailov: Bulgaria already manufactures parts for a whole car

There is a constantly rising interest for investing in Bulgaria's automotive industry, which has so far manufactured mostly car parts, says Ivan Mihailov, board chairman of Automotive Cluster Bulgaria (ACB). However, local plants already manufacture parts that are used to assemble whole cars, and it is a matter of time for whole automobiles to be assembled in plants on Bulgarian territory, he says.

- The interest in Bulgaria's capabilities for research and development, as well as manufacturing, in the automobile industry registers has been accelerating rapidly like an avalanche. What is the reason for this?

- Like an avalanche indeed and the key point here is how this acceleration could be met by our country's capabilities. In past 15 years or more, the number of investors in Bulgaria, mostly foreign companies, has grown significantly and our country has deserved its spot on the map of states with developing auto industry. This is not by chance because we have excellent specialists, both engineers and other employees, and we can add to this Bulgaria's geographical location, traditions in electronics and information technologies, as well as the level of education. With a high enough number of already established companies and considering the geopolitical spot of Bulgaria in Europe and particularly in the Balkans, the favourable investment climate and conditions, the level of experts employed by this industry, who have long-time experience and knowledge of the standards and requirements of car makers, it is quite natural that investment interest accelerates like an avalanche.

The pace of wage increase in the auto sector, and especially in research and deployment, has been moving hand-in-hand with payment increase in the IT sector. But the same is also valid for manufacturing jobs. Bulgaria however, attracts investors not only with the cost of labour but also with many other advantages. Wage is just one of all. There are of course trends that are worrying, and among them is the capability of our country to meet the investment interest. And the problem here mainly is the lack of enough personnel to be hired not only in big cities but also in the countryside. The high concentration of businesses in large cities is unhealthy, both for the cities themselves and for companies that operate in a highly competitive labour-force environment. But, there is no company that would pick a small town or a village because of the lack of proper infrastructure. There are no investor or company that do not consider the challenge of meeting the demand of labour force in order to achieve growth.

- In spite of the many manufactures of auto parts and systems for automobiles, there is no production of whole cars in Bulgaria. Why is that?

- Not once or twice, have I and my colleagues pointed out that if you take into consideration the automobile industry map, you can see that we can assemble whole cars, and we also have examples like the manufacture of Great Wall in the city of Lovech. There are several aspects of the challenge of attracting a large automobile manufacturer in Bulgaria. The first point is the active role of the state in the process, as well as all the connections and discussions at international level. There is no country of Central and Eastern Europe which doesn't aspire and compete for enlarging the presence of already existing manufacturers or attracting new ones. On this front our task is harder and requires more efforts in the competitive struggle. The next important thing is the presence of infrastructure that corresponds to the high demands of manufacturers. I believe that the dynamic development of industrial zones and their successful management contribute to this process. I also have in mind the road and railroad infrastructures, which are critical for the sector. Logistics is the second most important factor after human capital, which, as I mentioned before, is of top importance.


- What about the future of the automobile industry here?

- I expect that the pace of development of Bulgaria's auto industry will be faster than the ones many other economic sectors. Currently, our contribution to GDP is no more than 4 per cent but I believe it will grow much higher. There are software projects in the phase of development in Bulgaria, and also sensors, radars and autonomous car components. This means that our manufacturing activities are constantly becoming more technological and all this in a predictable and stable environment. A testing site will be built for autonomous automobiles with the help of Bourgas Municipality, and this is but one example of what is happening in our country. I believe this paints a more optimistic picture...

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