Electrical equipment manufacturing in Serbia

Electrical equipment manufacturing has become a central pillar of Serbia’s modern industrial economy, undergoing rapid transformation from a legacy sector into a high-performing, export-oriented engine of growth. The shift has been driven by foreign investment, domestic modernization, regional integration, and a skilled labour force rooted in a century-old engineering tradition.

Recent official data underscores this momentum. According to the Statistical Office of the Republic of Serbia, the industrial production index for the manufacture of electrical equipment reached 113,1 in March 2025 – a year-on-year increase that reflects accelerating output in this sector. Broader industrial manufacturing grew by 10,4% in the same period, with electrical equipment manufacturing among the fastest-rising segments.

Historic foundations and long-term industry development

Serbia’s involvement in the manufacture of electrical components dates back nearly a century. Factories like Novkabel in Novi Sad, founded in 1921, and Elektroporcelan in Arandelovac, established in 1922, laid the groundwork for large-scale production of cables, insulators, and electrical parts. These companies leveraged domestic access to raw materials, including copper mined in eastern Serbia, particularly from the city of Bor, which continues to serve as a key upstream resource for the sector.
The city of Jagodina has historically been one of Serbia’s electrical industry strongholds. The FKS Cable Factory, founded there in 1947, was once Yugoslavia’s leading cable producer and remains the largest in Serbia. At its peak, the factory employed more than 8000 people and accounted for half of the country’s cable production. Two-thirds of its output was exported, contributing more than 60% of Serbia’s cable exports.

This industrial base gave Serbia a foundation of skilled labour and regional supply chains. Many of the legacy producers survived economic transitions and privatizations, while others were acquired or transformed by new investors, opening the door for more advanced and export-focused manufacturing.

Modern players and foreign direct investment

The 2000s brought a new wave of investment and modernization. South Korea’s Yura Corporation, one of the key success stories, entered Serbia in 2010 and purchased the dormant Zastava Elektro plant in Raca. Yura quickly expanded with facilities in Nis and Leskovac, focusing on cable harnesses and electrical systems for the automotive industry. By 2018, Yura employed over 6000 workers in Serbia and recorded annual revenues nearing EUR 178 million, placing it among the country’s top net exporters.

French multinational Schneider Electric represents another major presence. The company’s Serbian arm, headquartered in Novi Sad, has become an innovation hub for energy distribution and smart grid automation. Founded in its current form in 2008, Schneider Electric Serbia reached around 900 employees and EUR 28 million in annual revenue by 2018. In 2023, the company inaugurated its InGrid IT facility, a cutting-edge R&D and innovation centre housed in the revitalized Novkabel industrial zone. Notably, the facility earned LEED Platinum certification and is powered in part by solar energy, marking one of the most environmentally progressive industrial buildings in the Balkans.

The Ivo Lola Ribar Institute, based in Belgrade, provides further depth to the industry’s intellectual base. Known for its development of robotics, CNC machines, and industrial computing equipment, the institute is one of the few remaining publicly owned R&D centres in Serbia. Although smaller in scale, with just 38 employees and EUR 640 000 in revenue as of 2017, it exemplifies Serbia’s long-standing research tradition and capacity for advanced manufacturing.

Export structure and European integration

Serbia’s electrical equipment exports are deeply embedded in European supply chains, particularly in the automotive, automation, and energy sectors. In 2023, the country exported electrical equipment worth approximately USD 1,86 billion to Germany alone, making Germany the single largest destination market for Serbian manufacturers. A significant portion of these exports consisted of insulated wire and cable – Serbia’s flagship export in this category – which generated over USD 645 million in 2023.
Further key European partners include Hungary, which imported USD 555 million worth of Serbian electrical equipment, followed by the Czech Republic and Slovakia, with USD 420 million and USD 369 million respectively. These exports are mainly composed of intermediate goods such as motor components, switching apparatus, ignition coils, and energy system parts.

Though smaller in scale, Serbia’s exports to the United States also illustrate its advanced manufacturing capacity. In 2023, these exports totalled USD 60,7 million and included electric motors, ignition equipment, lighting systems, and microassemblies. Serbia even exported nearly USD 20 million in electrical equipment to China, further reflecting its integration into global value chains.

However, Serbia still imports certain specialized equipment. For example, although it exported USD 18,8 million worth of electric soldering tools, it also imported over USD 75 million of the same, indicating reliance on foreign-made precision equipment in certain niches.

Market size and future outlook

According to research compiled by IBISWorld and Statista, the Serbian electrical equipment manufacturing sector was valued at roughly USD 896,8 million in 2024, with a steady annual growth rate exceeding 10% since 2019. Market research firm ReportLinker projects further expansion, estimating a market value of USD 487 million in domestic electrical equipment sales by 2028 and nearly USD 3,9 billion in exports.

Growth is not limited to traditional markets. Serbia is increasingly producing components for renewable energy technologies, including solar panel junction boxes, inverters, and wind turbine subassemblies. This shift is being supported by Serbia’s bid to align with EU energy goals and sustainability standards. As the EU accelerates its Green Deal agenda, Serbian manufacturers are positioning themselves as regional suppliers of electrical components for clean energy projects.

Opportunities in nearshoring and value chain realignment

One of Serbia’s major competitive advantages lies in its geographic and economic position. Situated at the crossroads of Europe and connected via road, rail, and energy infrastructure to the EU, it is an ideal nearshoring destination for European manufacturers seeking proximity, lower costs, and reduced supply chain risk.
The electronics and electrical sectors have seen a surge in foreign direct investment from companies aiming to relocate supply chains from Asia to Eastern Europe. This trend has accelerated post-pandemic, as manufacturers seek resilience over maximum efficiency. Serbia’s access to copper, skilled engineering talent, and favourable investment conditions have all contributed to this shift.

Companies like TF Kable from Poland and Shinwon from South Korea have invested in new facilities in Serbia, particularly in the production of wire and cable systems. Domestic firms have also increased their capacity, benefiting from public-private partnerships and EU pre-accession funding schemes for industrial modernization.

Serbia’s edge in regional electrical manufacturing

Serbia’s electrical equipment manufacturing sector has emerged as a competitive player in Southeast Europe, benefiting from a combination of technical expertise, cost advantages, and strategic positioning. When compared to some of its neighbouring countries – Croatia, Bosnia and Herzegovina, North Macedonia, and Montenegro – Serbia’s sector stands out in several key areas.

Serbia’s strength lies in its robust engineering capabilities and skilled workforce. The country boasts a long-standing tradition in electrical engineering, supported by a strong educational system that produces a steady stream of graduates in electrical and electronic engineering. This technical proficiency is further enhanced by vocational training programs and research institutions that contribute to a highly specialized labour force. In contrast, while neighbouring countries also possess skilled labour, Serbia’s emphasis on technical education and research and development provides a more advanced foundation for electrical equipment manufacturing.

Cost competitiveness is another area where Serbia excels. Labour costs in Serbia are significantly lower than in many EU countries, offering substantial savings for manufacturers. Additionally, the country provides affordable operating expenses, including utility costs and infrastructure, which contribute to overall profitability. While neighbouring countries may offer similar cost advantages, Serbia’s combination of low labour costs and efficient operating expenses makes it an attractive destination for manufacturers seeking cost-effective production.

Serbia’s strategic location at the crossroads of Eastern and Western Europe offers logistical advantages for quick and cost-effective transportation of goods to the EU. This proximity allows manufacturers to reduce transportation costs, overcome trade barriers, and respond swiftly to market demands. While neighbouring countries also benefit from geographical proximity to the EU, Serbia’s well-developed infrastructure and access to regional and international markets further enhance its appeal as a manufacturing hub.

The Serbian government actively supports the electrical equipment manufacturing sector through various incentives and reforms. These include tax incentives, grants, and financial support programs aimed at attracting foreign direct investment. Additionally, administrative reforms have streamlined processes, reduced bureaucracy, and enhanced business efficiency, facilitating smooth operations for manufacturers. While neighbouring countries also offer investment incentives, Serbia’s comprehensive support measures and commitment to regulatory alignment with EU standards provide a more favourable business environment.

Furthermore, Serbia’s participation in Free Trade Agreements (FTAs) with markets such as the EU, Turkiye, and the European Free Trade Association (EFTA) member states expands export opportunities for manufacturers. These agreements grant preferential access to various markets, enhancing Serbia’s position in the global supply chain for electrical equipment. While neighbouring countries are also signatories to FTAs, Serbia’s extensive network of agreements provides broader market access for its manufacturers.

In conclusion, Serbia’s electrical equipment manufacturing sector distinguishes itself through its strong engineering capabilities, cost competitiveness, strategic location, supportive business environment, and extensive trade agreements. While neighbouring countries possess certain advantages, Serbia’s comprehensive approach to fostering a competitive manufacturing sector positions it as a leading destination for electrical equipment production in Southeast Europe.

Momentum with a strategic future

Electrical equipment manufacturing in Serbia combines decades of industrial heritage with modern capabilities and future potential. From basic cables to complex automation components, Serbian manufacturers are deeply embedded in regional and global value chains. Their competitiveness is underpinned by strong export performance, an improving regulatory environment, and targeted foreign investment.

While challenges remain in workforce development and niche technological capacity, the overall direction is clear. Serbia is transitioning from a low-cost production hub into a mid-to-high-tech manufacturer of electrical equipment. As global value chains restructure and Europe doubles down on energy resilience, Serbia’s position – geographically, industrially, and politically – offers a unique platform for continued growth.