September 14, 2019 - Why does Croatia have no car industry to speak of? Is there any potential? That man Mate Rimac thinks so. A look at what is happening in Slovakia.
The Facebook post which has made me smile the most this month so far came from Mate Rimac. The electric car supremo was celebrating the latest success of his Greyp bike:
The Greyp G6 is the world’s most innovative e-mountainbike. Officially. Designed and made by 70 girls and boys in some little place called Sveta Nedelja in Croatia. Enjoy it all!
I have met Rimac three times and he has always been very complimentary about TCN. The last occasion was at the recent Entrepreneurial Mindset conference in Zagreb, where he was kind enough to come over and say hi to his 'favourite fat Brit'. It does not take long to be in his company until you are infected by his positivity and his almost childlike enthusiasm for what he is doing and achieving. One can only imagine how you process that incredible success in such a short space of time, but young Rimac comes across as very grounded and focused. And he really does wonder at the ability of 70 girls and boys in a small town in Croatia and their ability to design and make the most innovative e-mountainbike in the world.
As just one of their products...
Listening to Rimac speak about his entrepreneurial journey was arguably one of the highlights of the conference for all, but as his very impressive presentation went on, I found myself asking the question - what if we replaced the word 'Rimac Automobili' with 'Republic of Croatia'?
Rimac was working out of a garage as recently as 2010, not an unfair symbol of the Croatian economy right now. With some great ideas, innovation, dedication, persistence and 48 hours a day of hard work, 14 days a week, that garage has been exchanged for something altogether more impressive, as you can see above. Is there a way that the Republic of Croatia could emulate the Rimac trajectory?
In just 9 years, that garage has expanded considerably. Is there a component which could be injected into the Croatian economy which could push it in the same direction, if not to the same levels of success, then at least somewhere on the way?
A country with impressive and achievable goals such as Rimac Automobili has set itself?
Because if a tiny company can go from nothing to being a global leader in 9 years, why can a country not follow suit in certain aspects, especially if it has support and open doors.
Croatia 2.0. A country looking forward, not back, with defined goals. The Rimac garage of 2010 will see quite an upgrade by 2021.
And so began the most thought-provoking part of the Rimac presentation - the lack of a Croatian car industry and the success of neighbouring countries with their automotive industries.
A look at how the automotive industry directly contributes to GDP in neighbouring countries.
And it not just the factories which make the cars, but the hundreds (from memory he said 500) of companies in Slovakia which produce parts for those vehicles. Jobs all over the country.
A map of the automotive industry in Europe. Guess which country is missing out? Sales for Rimac cars may start at $1 million for Concept_One, but they have produced less than 20 cars in total so far, as far as I am aware.
According to Rimac, Slovakia's exports of cars and parts ($22 billion) exceeds Croatia's entire foreign exports ($17.2 billion).
Slovakia versus Croatia over time.
Tiny Slovenia to the west of Croatia, with double Croatia's exports, including $4 billion from the automotive industry.
And yet, due to the stunning success of one small company in Sveta Nedelja, the perception of Croatian as a car-producing country is one of global excellence.
For a boy working out of a garage just a few years ago, Rimac has attracted some pretty awesome investors in his company, including Porsche and Hyundai. And their numbers combined dwarf Croatia's entire GDP.
Rimac also looked at the Estonian example, where their digitalisation excellence has transformed the economy and made it a digital and innovation hub. Just putting public administration online has saved the equivalent of 2% of GDP, as we learned in Lessons from Estonia: Farewell Uhljebistan, Welcome to the Future?
And like Slovakia, Estonia is outperforming Croatia. in recent years. Both Slovakia and Estonia have seen their economies having to adapt from socialism to capitalism. Their leaps ahead of Croatia have come in the last five years, not the last 25, a recent phenomenon.
The car industry for Slovakia, digitalisation and innovation for Estonia. What is Croatia's strategy and route to success?
"The key to success in the automobile industry is a country's strategy and vision of what it wants to achieve. I believe that now is the right time for Croatia to join the so-called third wave of investments in the car industry because we missed out on that opportunity in the last ten years," said Rimac.
He said that the first investment wave in the car industry caught the Czech Republic, Poland, Hungary and Slovakia, the second caught again Slovakia as well as Romania, while the third one could include Croatia, in which all of his partners were interested as were representatives of Hyundai and Porsche.
Will anything happen? Can Croatia move out of that 2010 garage and take advantage of the opportunity? Can it work with and build on the success of one small company whose outstanding success has put the Croatian car industry on a global level despite only producing less than 20 cars? If one small company can bring in over 100 million euro of investment from the likes of Porsche and Hyundai, what is the potential for the Republic of Croatia, not only to produce cars, but also starting other businesses to produce the various parts all over the country?
Wouldn't it be nice to have a major electic car production facility in the country which is home to the birthplace of Nikola Tesla, something inspired by the man whose 9-year journey from a car in a garage has made Croatia a global superstar in an industry it did not have a decade ago?
You can watch the Mate Rimac presentation in full below.
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