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Automotive Industry and its Results in Hungary
„Innovation in automotive industry in the Centrope region and in Hungary” INNO-AUTO 2012 8th November 2012 Sára Font, Consultant – Department of Supplier Programs Investment Promotion Directorate Hungarian Investment and Trade Agency - HITA
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Hungary: Home of automotive investments
Audi in Győr produces engines for all brands in the VW Group. (The second largest engine production plant in the World.) Mercedes has picked Hungary as its first manufacturing facility outside Germany. Suzuki has assembly line since 1992 in Esztergom. GM’s Global Recognition Award went to the Hungarian plant, Szentgotthárd, in 2008.
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Overview: Hungary’s major OEMs
Foundation: 1993 Products: TT Coupé/Roadster, A3 Cabriolet/Sedan Car. prod. cap.: 125,000 Engine prod. cap.: 1,900,000 Nr. of employees: 8,400 Revenue (2011): EUR 5,582 m EBIT (2011): EUR 759 m AUDI Hungaria Motor (Audi AG) Location: Győr Foundation: 1991 Products: Swift, Splash, SX4 Car. prod. cap.: 300,000 Nr. of employees: 3,400 Revenue (2010): EUR 1,535 m EBIT (2010): EUR 5 m Magyar Suzuki (Suzuki Motors) Location: Esztergom Szentgotthárd Győr Esztergom Kecskemét Tatabánya BUDAPEST Miskolc Székesfehérvár Pécs Szeged Szolnok Debrecen Nyíregyháza Hatvan Szombathely Foundation: 2008 Products: A Class, B Class Car. prod. cap.: 100,000 Nr. of employees planned: 3,000 Operation started in March 2012 Mercedes-Benz Manuf. (Daimler) Location: Kecskemét Foundation: 1991 Products: engines, cylinder heads, gearboxes Engine prod. cap.: 500,000 Nr. of employees (planned): 600 (1,400) Revenue (2010): EUR 82 m EBIT (2010): EUR 15 m General Motors Powertrain (GM) Location: Szentgotthárd Some of the major car manufacturers present in Hungary – increasing capacities and developing sites. Investments [EUR m]
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Facts and figures Production value : 19.4% of total industrial production (€ 15.9 bn) Automotive industry gives 20% of Hungary’s total exports (€80 bn in 2011 ) Main export market: EU (75 %) No. of companies: cca. 600 No. of employees: cca. 100,000 Average gross salary: 794 EUR/month Source: Hungarian Central Statistical Office, AHAI
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Top reasons for Hungary I.
Central location At the cross roads of 4 main European transportation corridors - I deal logistical center for the automotive industry (More than 90% of Hungary’s automotive production goes for export) Cost efficiency Competitive wages and labor cost/value ratio in European comparison in the CEE region. Tradition of innovation Long and successful tradition of cooperation between the universities and the producers in R&D. Long-term planning According to the sectorial estimations from passenger cars will be manufactured in Hungary.
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Productivity in industry
Estimates: Related GDP (PPP) per person employed in industry Highest volume of productivity in the region Source: IMD, World Competitiveness Online 2012
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University education meets the needs of a competitive economy
Executive survey based on an index from 0 to 10 (2012) Source: IMD, World Competitiveness Online 2012
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Competence centers Competencies in the Regions – Alignment of the Academic and Industrial Main Priorities Győr (engine, vehicle manufacturing) Veszprém (mechatronics, fuels and lubricants) Budapest (vehicle technology, electronics, mechatronics) Kecskemét (material sciences, vehicle assembly) Miskolc (driveline systems, mechatronics)
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Primary and secondary competencies – alignment with the local industry demand, maximum utilization of the resources, cooperation instead of competition
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Top reasons for Hungary II.
Strong supplier base: Over 600 companies in the automotive sector 12 of the 15 leading Tier 1 company settled down in Hungary Hungarian automotive suppliers have several years of experience supplying OEMs & Tier 1s Strong governmental supplier development activity Extended vertical and horizontal supplier connections
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OEM Tier 1 Tire man. And many more… R&D
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More than 600 suppliers Northern Hungary Central Hungary
Akzo Nobel Coatings Firth Rixson ARRK Ganz Foundry Bosch Gibbs CSABAcast Hi-Lex Delphi Knaus Tabbert Delta-Tech Kovács Exir Lear Leoni Mitsuba Modine Prec-Cast Remy Saia-Burgess Salgglas Shinwa Stanley Electric Starter Battery Technoplast ZF AVL Hokushin Siemens VDO Cascade Ibiden Tauril Clarion Lear ThyssenKrupp Continental Autom. MGM Toyo Seat ContiTech Fluid Michelin Vogel Sitze Draexlmaier Mono-Ipolyfabric Webasto EMT NABI W.E.T. Excel Csepel PEMÜ Zollner FESTO Schwarzmüller GE Lighting Semcon AFL Kirchhoff Ajkai Elektronika Lé Belier Albert Weber Lear Alcoa Magyarmet Asahi Glass Michels Benteler Musashi Borg Warner Plasticor Bourns Plastimat Bridgestone Poppe+Potthoff Continental Autom. Rába Denso SCI Sanmina Diamond Electric SCS Euro Excedy SEWS Gedia Suoftec Gestamp Toyo Seat Hammerstein U-Shin Hankook Valeo ITW Siewer Videoton Johnson Controls Visteon Karsai Plast Wescast Central Hungary Northern Great Plain Central Transdanubia Caroflex Carrier Transicold Eagle Ottawa Eismann FAG (Schaeffler) Faurecia Euroszol F.Segura Hajdu Autó Haldex Hübner Isringhausen Jász-Plasztik Lé Belier Michelin Nief Phoenix Western Transdanubia Arcelor Győri Plast Autoliv Hirschler B.O.S. Kravtex BPW Rába Luk Savaria Car-Inside Magna Steyr Dana Nemak Dekorsy Rába Delphi Rehau Edag Rekard Produkt EMT Rudolph Logistik Erbslöh Semperform Euro Exedy Veritas Euro Elzett SMR Federal Mogul Vogel und Noot Southern Great Plain Brose Johnson Controls ContiTech Fluid KALOplastic ContiTech Rubber Knorr-Bremse Csaba-Metál Kunplast-Karsai Eckerle Linamar Emika Magna Exteriors EuroFit Pata Freudenberg Phoenix Mecano Hirschmann ThyssenKrupp HBPO Zorge Southern Transdanubia BHG CabTec Ratipur Interplus
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Ernst & Young’s 2012 European attractiveness survey
Europe's future attractiveness Excellence, clustering and market dominance can combat industrial outflow. Europe’s manufacturing strength can be seen in Germany, Hungary and Poland where large automotive companies are expanding operations’. Some CEE countries and regions, including Poland, Hungary, the Czech Republic and the Baltic states, continue to attract good FDI inflows from investors seeking relatively favorable labor costs and skills availability to maximize returns’.
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Light vehicle production in the Central and Eastern European Region (in thousand units)
Source: Ernst & Young, The Central and Eastern European automotive market, 2010
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About the Hungarian Investment and Trade Agency - HITA
Founded by the Hungarian Government in 2011, in order to assist in achieving its external economic policy goals The supervising body of HITA is the Ministry for National Economy 150 employees, mainly consultants on sectorial basis Main tasks are: promote and facilitate foreign investments develope international trade help the SMEs to enter in to multinational companies’ supply chain develope the EU integration-oriented SMEs
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Our services for successful investments
Pre-decision Ramp-up Operations Tailored and comprehensive information packages on the economy, financial incentives, business environment, tax Assistance in location search and evaluation, site visits organized Partner meetings organized Project partner and project financing advisory Supplying information on permitting procedures Assistance in applications for incentives Expansion assistance Advocacy to improve the business climate
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Our services for successful investments:
Incentives Services of the Incentives Department: EU co-financed tenders Subsidy based on individual government decision Development tax allowance Job creation subsidies – 2 options Training subsidy
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Our services for succesfull investments: Supplier Department (I.)
Regular personal meetings with management for setting up and reviewing supply strategy and project plan Longlisting business contacts about possible Hungarian suppliers Parametering the possible Hungarian suppliers Prefiltering business contacts for the OEMs Shortlist business contacts to maximize the chance of the successful cooperation
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Our services for succesfull investments: Supplier Department (II.)
Match-making between the OEM and the suppliers Business seminar, Conference, Supplier Day, Shows & Exhibitions On request establishing business relationship On request consultancy with other governmental organs Follow-up meetings Building interactive supplier database and e-market service
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Thank you for your attention!
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