Sweden's automotive sector is characterized by its unique structure, highly skilled workforce, heavy investment in R&D and its core competencies in safety, telematics and environmental technology. Production facilities all across the world, high-volume exports mainly to the other EU countries and the Americas as well as a strong position in the growing domestic market are a guarantee for ongoing success of the automotive sector in the future. These favourable local characteristics have attracted foreign direct investment (FDI) from the global automotive industry in the past. Below is a brief overview of the industry and the domestic market, with a special focus on the automotive suppliers.
Production and exports
The Swedish automotive industry produced a total output of 750,000 motor vehicles (including assembly and production abroad) in 2004 (source: ACEA, 2005). The four main players are the two Swedish premium car manufacturers:
Volvo Cars (sold to Ford Motor Company in 1999) and
Saab Automobile AB (taken over by GM in 2000)
and two of the world's leading heavy truck manufacturers:
Volvo Trucks (including the truck operations of Mack and Renault) and
In addition there are around 200 major Swedish suppliers. The automotive industry plays a vital part in the Swedish economy, as it employs over 140,000 people and has a 15% share of commodities exports, making motor vehicles and parts the single most important export sector (source: Automotive Sweden, 2005).
While the Swedish manufacturers of passenger cars account for not more than one percent of worldwide production (of which 85% is exported), the Swedish heavy truck production makes up 20% of the world's annual output (of which 95% are exported) (source: Swedish Institute, 2005).
Not only exports are strong but also the domestic market. Although small in comparison to other European markets, Sweden represents the largest passenger car market in Scandinavia: With a population of roughly 9 million people there were 4.2 million registered passenger cars in Sweden at the end of 2005, which corresponds to a density of 466 cars per 1,000 inhabitants.
The number of commercial vehicles in use was 475,000 in the same year. New registrations of passenger cars in Sweden amounted to more than 274,000 units in 2005, an increase of 3.8% compared to 2004, while heavy trucks (incl. buses) hit 42,000 newly registered units, up 12% from the previous year (source: BIL Sweden, 2006). Swedish OEMs account for roughly 30% of those new registrations in the passenger car sector and for more than 90% of newly registered heavy trucks in Sweden (source: bfai, 2005).
In past decades the Swedish passenger car market was characterized by significant fluctuations, reaching the last peak level in 1999. However, in more recent years there has been a new trend, with a more stable market and healthy growth rates (source: Swedish Institute, 2005 and bfai, 2005). Sales are expected to continue to rise over the next years. The reason is necessary replacement investments. Half the fleet of cars on Swedish roads is ten or more years old - a figure which is high compared to many other European countries and the EU average of 8 years (source: Europe Autoparts, 2004 and ACEA, 2005).