North Macedonia Revs Up its Automotive Industry, but Low Wages Persist

Atanasov, who is 33, had spent two and a half years working for a foreign oil and gas company, a job that saw him spending more time in Africa than at home. When a friend died of malaria, he decided enough was enough.

Armed with an undergraduate degree in motor vehicle engineering, he applied for a job as production planning engineer at Kostal Macedonia in Ohrid, once home to a factory producing belts, mirrors and other parts for Yugoslavia's iconic Zastava.

And Atanasov hasn't looked back.

Photo: Kosta Atanasov/private

Today, he is a production planning manager whose colleagues join him every December for a birthday swim in the icy waters of Lake Ohrid.

"The effort that we put in for our jobs pays off in the end," Atanasov told BIRN. And he's not the only one benefitting from the growing automotive sector in North Macedonia.

In 2019, the 15 biggest car parts companies in North Macedonia - German Kostal among them - generated total revenues of 2.8 billion euros, or the equivalent of a quarter of the country's gross domestic product, GDP, according to the state investment agency Invest North Macedonia. The 15 accounted for 43 per cent of total annual exports.

Kostal itself has grown its North Macedonia workforce from 48 in 2015 to nearly 1,000 in 2022.

Photo: Kostal factory/source: North Macedonia's government

While some experts caution about the dangers of over-reliance on a single export industry, others say such investment creates the chance for export diversification given the variety of materials used in such factories. The country has recently shifted away from traditional exports like iron and steel in favour of a range of higher-value products such as machinery and transport...