Automotive Cluster Bulgaria, Lyubomir Stanislavov: The automotive sector has established Bulgaria`s place on the European high-tech industrial map

Electronics InterviewSouth-East European INDUSTRIAL Мarket - issue 4/2022 • 08.11.2022

Automotive Cluster Bulgaria, Lyubomir Stanislavov: The automotive sector has established Bulgaria`s place on the European high-tech industrial map

Arch. Lyubomir Stanislavov, CEO and Member of the Board of Directors of Automotive Cluster Bulgaria, for South-East European Industrial Market

 

What are the long-term takeaways after this year`s "Automotive & Mobility Forum: Southern and Eastern Europe" conference in terms of key challenges and opportunities? What priority projects is the ACB currently working on in this regard?

One of the key takeaways from the conference is that the development of the automotive industry has started to rely more and more on software. A large part of the IT companies in Bulgaria produce automotive software for renowned OEMs, and companies such as Daimler already have software subsidiaries in Bulgaria. "Automotive & Mobility Forum: Southern and Eastern Europe" actually opened with a keynote speech by Cariad – Volkswagen`s software division, which has already recognized Bulgaria`s potential in this area.

Another main topic, which shouldn`t be a surprise to anyone, is the focus on electrification. All major OEMs have acknowledged that electric vehicles are the future and our conference also reflected this trend. Bulgaria`s contribution to this was also presented by Next e.GO – the future EV factory in Lovech.
The third major trend is autonomous vehicles, and this is perhaps the most unfamiliar topic so far, but one which is developing rapidly. Thanks to the presentations by Bosch Engineering Center Sofia and Hong Kong`s Teksbotics the attendees were able to gain insight into the bright future in this area and the various opportunities it presents.

 

The number of electronic components and devices in cars is growing every year. How far do you expect this trend to evolve and what impact does electrification have on the technological development of automotive electronics?

Today more than 50% of the profit of a traditional OEM is coming from the electronic and software components. The enormous evolution of microelectronics, has led to a significant increase in infotainment, lighting and sensor applications that require a durable and reliable design. The industry is actively contributing to road safety through the development and evolution of technologies to limit accidents, for example through stability control systems and driver health status.

Internet-connected infotainment systems are platforms for delivering an increasingly rich set of content and services to drivers and passengers. While OEMs have been offering connectivity, telematic services and infotainment systems for many years, monetizing these services continues to be weak. But this is about to change.

Today`s consumers demand connectivity, phone apps and rich online content. An Autotrader study shows that connectivity is becoming an important factor in the decision to buy a car. According to this study, 48% of car buyers prioritize the technology in their vehicle over more traditional considerations such as brand name, performance or design.
Previously, OEMs offered sophisticated head units and high-end audio systems, but these were mostly available in high-end models, assuming luxury car buyers will be willing to pay more for high-tech features and expensive services.

Today, 56% of car shoppers, especially the ones under 35, know exactly what in-vehicle technology they want and are less likely to compromise on the features they want. After having realized this trend, OEMs are moving to better align the value proposition to demographics by adding connectivity and in-vehicle features across their portfolio, including their non-premium brands.

 

How would you assess the role of Bulgaria-based electronic component manufacturers for the regional and global automotive industry? What is your evaluation of the working force qualification level and the degree of technical modernization in the sector?

With its rapid pace of development in recent years, the automotive sector has established our country`s place on the European high-tech industrial map. It is impressive that about 80-90% of the cars produced in Europe have parts and components of Bulgarian origin. Although the Bulgarian automotive sector developed relatively late in comparison to other countries in the region, such as Romania or Turkey, the companies operating in the sector now are more than 350 and the annual GDP amounts to 11%.

The Bulgarian automotive industry is developing in relation to the labour force, as well. For the past decade, the number of employees in the sector has risen significantly – from about 7000 to more than 70 000. The companies implement various mechanisms to support the development of their employees` professional competences.
Also, the close co-operation between the business and educational institutions creates opportunities for a successful career start of the young specialists. Initiatives, such as dual education and internship programs are proven instruments for gaining knowledge and experience in a real working environment. Such projects are part of the long-term strategies of leading companies like Festo, Bosch, Visteon etc. Moreover, the vocational schools and technical universities in Bulgaria are constantly updating their curriculum in accordance to the needs of the business. One good example is the bachelor program "Smart Systems and Artificial Intelligence" – a joint project by Bosch Engineering Center Sofia and Technical University of Sofia.

The technical modernization is an integral part of the development of the sector in the context of Industry 4.0 and the majority of the automotive companies in Bulgaria are focused on their digital transformation. The Automotive Cluster is actively supporting its members in the process of implementation of intelligent technologies through various projects. This results in increased competitiveness of the companies and in the quality of the manufactured products.

 

What is the current investment climate in Europe in the context of the growing abandonment of combustion engines, the widespread electrification and the pandemic? Are your strategies for attracting investors to Bulgaria changing and how?

The European investment climate is recovering from the challenges of the past years and the Bulgarian companies are transforming to meet the fast-changing industry. We are glad that more and more automotive companies developing innovative solutions recognize our country as a potential location to establish their manufacturing facilities or R&D centers. For example, the Japanese manufacturer and distributor of electric motors Nidec will establish a new R&D center in Sofia. Nidec`s Bulgarian engineering team will develop inverters for hybrid and full electric vehicles.

One of Automotive Cluster Bulgaria`s main objective is to support the development of the Bulgarian automotive sector so that it could be more competitive and sustainable. To that end, we will continue to actively work for attracting high-tech leaders that shape the mobility of the future.

 

What is your forecast for the future of the automotive sector in our country in 10 years? What goals should be worked towards in order to turn Bulgaria into an international innovation center?

For the upcoming decade, I believe that our country has the potential to become a hub for innovations in the field of electronics, software, electric mobility, etc. In 10 years` time I hope Bulgaria will have more than one OEM production facilities for car assembly and another several ones for battery production. Some of the actions for the future success of the business includes support by the state, as well as investments in the education and the professional skills of the specialists.

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