Thursday, 18 June 2020

Former Volkswagen Executive Ends Up in Custody in Pula - Newspaper

ZAGREB, June 18, 2020 - Axel Eiser, a former executive at Volkswagen and Audi, was arrested at the Kastel-Dragonja border crossing with Slovenia last week and placed in investigative custody in Pula, the Vecernji List newspaper reported on Thursday.

Eiser, former head of engine development at one of the world's biggest automobile companies, is wanted by the United States in connection with 2015's emissions test scam known as Dieselgate.

An investigation found that Volkswagen had programmed diesel engines to activate their emissions controls during emissions testing, tricking inspectors into thinking that they complied with emissions rules. The cars actually emitted far more pollution while on the road.

As a result, Volkswagen has paid $33 billion in fines. So far only a small number of executives have been arrested, while others have evaded justice for now because Germany does not extradite its own citizens.

Explaining the extradition procedure, Kresimir Devcic, investigating judge at Zagreb County Court, said that Eiser can appeal the detention order. After that the United States will be asked to provide all relevant documents within 40 days, together with an extradition request. The court then rules on the request and the ruling is subject to an appeal, after which the justice minister decides on extradition.

Devcic said that a problem could arise if Germany also asked for the extradition of its citizen, in which case Croatia would find itself "between a rock and a hard place" and the decision would again have to be made by the justice minister.

"The Justice Ministry has not yet received the extradition request, and when we receive one, it will be decided by the court first, so we should wait and see what it will decide. This will be followed by the appeal process and the entire legal procedure, so that for now it is too soon to comment on this case," Justice Minister Drazen Bosnjakovic said on Wednesday.

It could take months before this case is decided and until then one of the most powerful people of Volkswagen and Audi will stay in jail in Pula, Vecernji List said.

Wednesday, 23 October 2019

Government to Increase Support to Exporters

ZAGREB, October 23, 2019 - The government can support exporters and enterprises by reducing para-fiscal charges and by offering financial schemes for improvement energy efficiency in industry, Environment and Energy Minister Tomislav Ćorić said at a convention of exporters organised by the Lider business weekly newspaper.

Minister Ćorić says that Croatian exporters are faced with a series of challenges, some of these being an increasing cost of labour and electricity which is something the state cannot influence to any great degree. However, the authorities can reduce para-fiscal charges, which it is already doing, he added.

He recalled that currently a new model for paying charges for renewable energy sources (OIE) is being implemented which should relieve large consumers in the energy intensive industry sectors. This is at the final stage of negotiations with the European Commission and the cutting costs can range between 80%, 60% and 40%.

Ćorić said that the ministry had provided 495 million kuna in subsidies over the past two years to stimulate energy efficiency in industry.

In his comment on repeated complaints by exporters that the kuna currency is too strong, the minister said that a strong kuna has become an alibi for failure because it has been strong since 1994 while on the other hand since then to date, we have had a "unbelievable stable exchange rate."

Asked about the possibility of Volkswagen coming to Croatia, Ćorić said that he did not personally participate in those talks however he believes that a move like that would mean a lot to Croatia's industry and import sector.

If talks in that regard have commenced, everything will be done for that investment to be achieved, Ćorić said.

Marinko Došen, of the AD Plastik Group that manufactures car plastic parts said that the possibility of Volkswagen coming to Croatia depended on what concessions it would be offered and that statements by Economy Minister Darko Horvat were encouraging in that regard. The figures show that for every employee in the automobile industry there are at least seven employed in the entire infrastructure and supply industry, Došen underlined.

He believes that the arrival of Volkswagen would be an excellent boost for Croatia's economy. Volkswagen is one of AD Plastik's buyers and the arrival of that German giant would open the opportunity to finally sell something on the local market.

Croatia is going into the fight for an investment worth over a billion euro, which is how much German car maker Volkswagen plans to invest in a new factory, Večernji List daily said on Tuesday, citing sources at the Ministry of the Economy.

The Germans planned on building the factory in Turkey but ditched the plan over Ankara's military offensive in Syria, Večernji List says, adding that, according to well-informed sources, Croatia will be included in a new round of talks between Volkswagen and the interested countries, namely Serbia, Bulgaria and Romania.

Volkswagen plans to produce 300,000 vehicles annually and employ 4,000 people in the new factory, the newspaper says.

More economic news can be found in the Business section.

Tuesday, 22 October 2019

Croatia Entering Fight for New Volkswagen Factory?

ZAGREB, October 22, 2019 - Croatia is going into the fight for an investment worth over a billion euro, which is how much German car maker Volkswagen plans to invest in a new factory, Večernji List daily said on Tuesday, citing sources at the Ministry of the Economy.

The Germans planned on building the factory in Turkey but ditched the plan over Ankara's military offensive in Syria, Večernji List says, adding that, according to well-informed sources, Croatia will be included in a new round of talks between Volkswagen and the interested countries, namely Serbia, Bulgaria and Romania.

Volkswagen plans to produce 300,000 vehicles annually and employ 4,000 people in the new factory, the newspaper says.

The German company wanted to build the factory near Izmir, and the project was estimated at 1.3 billion euro. The plan was to begin the production of the Passat and the Skoda Superb in 2022 as the company seeks to relocate the production of the two models from its plants in Germany and the Czech Republic to produce electric vehicles there.

Turkish President Recep Tayyip Erdogan was so thrilled over Volkswagen's decision to build its factory in Turkey that he ordered that all government vehicles should be replaced with Passats, Večernji List said.

More news about Croatia’s car industry can be found in the Business section.

Wednesday, 15 May 2019

Mate Rimac Discusses Kia, Hyundai, Company Revenue and More

Celebrated Croatian entrepreneur Mate Rimac discusses Rimac Automobili's new partnership with Hyundai and Kia Motors, how he plans to give a certain percentage of the company to its employees, revenue, the future, and more.

As Jutarnji list/Gordana Grgas writes on the 14th of May, 2019, after it was announced that the Hyundai and Kia Motors had decided to invest a massive 600 million kuna in capital into Rimac Automobili, Mate Rimac announced in an interview for Jutarnji list that he would give seven percent of the company to his employees, from the cleaners to the directors.

We're bringing you the English translation of that interview here.

Why has Rimac Automobili entered into a partnership with Hyundai?

"We've been in contact with them for a couple of years and have been cooperating with them for a few years. They sent a strong delegation to us and, as soon as they saw the company, as soon as they saw what we were doing, they decided to invest immediately. In October last year they gave us an offer and we entered into negotiations. To have a partnership with such a company is very important for us. When looking at comparisons, they have a revenue of 250 billion euros, which is four times more than the Croatian GDP, and we're also working directly with the administration. Euisun Chung, who was there upon signing the contract, is the executive vice president, the grandson of Hyundai's founder, who's now taking over the firm from his father.

We're quick, small and innovative, we see and create the future and that's very interesting to them, this is hugely important for us because, on the one hand, we've got the Volkswagen Group and Porsche, and then we've got Hyundai and Kia on the other, and we've been so busy with work with these companies that we don't know where we're going!

The best thing is that they're not just buyers of our products but also shareholders, therefore it's in their interest that the company succeeds. They will help us build faster in areas where we may have some weaknesses, for example in industrialisation, in the transition from small-scale to large serial production.

Today, we're dealing with very complex systems for large car manufacturers, power systems, batteries, electronics, etc., we've achieved all that very quickly, but we need strategic partnerships. It's very difficult, especially moving from small to large series. We need money to help the company achieve its goals. We invest a lot, we're constantly expanding our plants, we employ more than 500 people, more than 300 engineers... We're not like the others, we're not wired money from the state but we get our money on the international market, and there's nowhere better to find money than with a company that really understands what you're doing, which is a partner and also a buyer,'' stated Mate Rimac.

What's the ownership structure of Rimac Automobili like now? You said you wouldn't remain the majority owner...

"Now I have .. (looks at his phone) Just a second, I have all of that in a document..."

Do you not know what your share is now? Does that not matter to you?

''Well, that's not important to me. People don't really understand that. I'm killing myself with this job and I'd be the happiest man in the world if there was someone who could run the company better than me, so I could just do what I like doing, the technical part of things. Now I'm the executive and technical director, and now I hold 47.7 percent, the Chinese camel group holds 14 percent, Hyundai has 11 percent, Porsche has 10 percent, Kia has 2.7 percent, and the remaining shares belong to the investors from 2012 and 2013.''

Are the employees among the co-owners?

"No, but we're working on that now, all of the employees will get a share, up until now, the ESOP was not worth it for them because of the tax. They'll probably get seven percent, from the cleaners to the directors, but not everyone will get the same share.''

How much is Rimac Automobili worth now?

"More than 500 million euros."

Why did not you not get to capital through an IPO, on the stock market?

''A lot of technology companies are now doing IPOs and they're actually losing money, they still have no stable and profitable business. Let's say Lyft, Uber or Snapchat... I don't want that. I want to make an IPO when the company's numbers are at that level. The company's potential is huge, and we have now used a piece of it and it's a shame to go out out onto the stock market with this company's situation. In 3-4-5 years, it will be at a completely different level. Besides, we have good access to capital outside of the stock market, we've got that luxury.''

How much was Rimac Automobili's income last year?

''I wouldn't go into income, there are no final reports yet. That's not our focus either, but a long-term trend. Here's an example - the car that we're developing for Hyundai now goes into serial production in 2023 only. Those are the cycles of our projects and to us, as well as to our shareholders, it's really neither here nor there what the financial outcome will be for this year or for next year, we're building a long-term story.''

Are you making a profit or are you still in the minus?

''We were still in the minus last year because we invested a lot. It's important to note that this minus comes from shareholder money, and everyone agrees that it's the company's plan.''

What will you specifically use this 600 million kuna for?

''For many things. This is part of our C investment round, and we'll still have investors in this round for another 70 million euros, but we don't know who that will be for now, but they will probably be financial investors. One of the things we will invest in is building our campus, our development and research centre and our factory, and another company expansion, employing a lot of people and equipping the company. For the transition to serial production, it's necessary to equip our production plants, test our products, develop them right up to the end, certify them... It's a big thing.''

Where will the new campus be? And what will be there?

''We're planning a campus for 2000 people because we want to have a longer-term solution. The headquarters of the company will also be there, as well as the development and research centre, production, testing, there'll be a hotel for guests and employees coming from elsewhere, kindergartens for employees' kids, restaurants, food production, hairdressers, sports facilities... I want it all to be integrated there.''

Where will this be located and when will you embark on construction?

''Near Zagreb. The location hasn't yet been agreed, we're look at a few of them, we're negotiating. Construction should start early next year.''

I guess the campus will be a little special in the aesthetic sense.

''Nine international and several Croatian architectural studies are currently working on suggestions for conceptual solutions for the campus. Among them was Lord Foster (British architect Norman Foster), we had a meeting the other day. He worked on Apple's campus and many other world-famous buildings. Everyone is so excited about this project and offering some great suggestions. They tell me that there's no such thing anywhere else, the combination I want - the campus being open to the public, the care for the employees and the connection with nature.''

The serial production of your C-Two has been announced for next year. Where are you going to do this?

''We got a hall in Veliko Trgovišće (Krapina-Zagorje County). The C-Two prototypes are still being done in Sveta Nedelja, and when we finish them, we'll move the manufacturing of the prototypes to Veliko Trgovišće. We already produce the batteries and the power systems there because we're out of space here. We're now there in five buildings and we were looking for something a bit closer to Sveta Nedelja, but there was just nothing there. Since there is no industry in Croatia, there's not much out there to rent. So now we're in Veliko Trgovišće, and we have centres in Split and in Osijek.''

Why did you open them there, so scattered apart?

''We grew so quickly over the last year. We now have fifteen engineers in Split, and about ten in Osijek, ane they're now our competence centres - in Split, we do our own automotive software development tool operation, and we deal with our high voltage chargers in Osijek.''

The prime minister has never been in your facility?

''No, never. To make it clearer, I don't ask for anything from the government. All I do is to urge the government to do the right thing to bring the car industry to Croatia. I have proved that it's possible.''

Make sure to follow our dedicated business and Made in Croatia pages for more information on Mate Rimac, Rimac Automobili, entrepreneurship, manufacturing, production and business in Croatia and much, much more.


Click here for the original interview/article by Gordana Grgas for Jutarnji list

Sunday, 29 April 2018

One of Croatia's Most Modern Companies Does Business with BMW, Audi, Volkswagen

Empty Slavonia? Not quite. One ultra-modern company based in Vukovar-Srijem County is a very good friend of some of the top German car producers...

Monday, 7 November 2016

The Significant Growth of Car Sales in Croatia, Dominated by Two Brands

From January to October of this year, a total of 37,805 new vehicles were sold, which is 20.7 percent more than in the same period last year.