The automotive industry is one of the fastest growing in Macedonia. The industry has become one of the main forces driving economic growth in the country. Currently there are over 50 companies operating in Macedonia, covering amongst other OEMs, seat belts and seat belts parts production, busses and coaches, various automotive and machine parts and railway vehicles and components.

The Technological Industrial Development Zones are established by the Government of the Republic of Macedonia to provide favorable conditions for the development of the business activities by offering prepared industrial sites, per-built factories with completed physical infrastructure, support services and tax, customs and other incentives.

The key focus for most automotive manufacturers in Macedonia is successful establishment of production facilities and subsequent management in terms of human resources, inventory management, logistics, and quality standards compliance. A growing number of companies are expanding their activities through acquiring and improving premises, investing in new equipment and production lines, and hiring and training their workforce. 

The automotive company would typically be contracted by one or few clients, usually from the corporate group, while the production is dispatched to various destinations for assembly at the plants of car manufacturers. This often involves a complex purchase order process and requires vigorous production planning and logistics organisation. 

Macedonian companies would normally work under contract manufacturing arrangement, where the prices of the components are fixed globally between the group client and the car manufacturer. Due to changes in the specifications of the components of the car manufacturers, equipment would have a short life cycle and frequent readjustments of production lines would become necessary. Suppliers would often be group companies and inventory management may need to be aligned globally. Based on our extensive experience in the automotive industries, KPMG can help in the following: 

People  

• HR advisory and compliance
• Legal and tax assistance to secondees
• Payroll outsourcing 

Supplier and client relations  

• Transfer pricing analysis and localization of global transfer pricing file
• Review and advice on resolving indirect tax issues with complex chain transactions  
• VAT advisory and compliance
• Contract compliance reviews for identification of areas for improvement 

Fixed assets  

• Implementing asset management solutions 
• Unification of reporting for local and group purposes  
• Legal, tax and accounting advice in respect of acquisitions or rentals of immovable property and equipment 

Finances  

• Audit  
• Full or limited scope tax review  
• Tax litigation and assistance in tax audits 

New entrants and expansions  

• Transactions & Restructuring services  
• Feasibility studies  
• Location search