1. 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

2. 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.

3. 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]

4. 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

5. 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.

6. 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

7. 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

8. 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)

9. Primary and secondary competencies – alignment with the local industry demand, maximum utilization of the resources, cooperation instead of competition

10. 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

11. OEM
Tier 1
Tire man.
And many more…
R&D

12. 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

13. 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’.

14. Light vehicle production in the Central and Eastern European Region (in thousand units)
Source: Ernst & Young, The Central and Eastern European automotive market, 2010

15. 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

16. 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

17. 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

18. 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

19. 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

20. Thank you for your attention!
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