Hungarian automotive industry: week 10
Last week saw the launch of mass production of the new Suzuki Vitara and important announcements by Japanese companies to invest in Hungary. The VW Passat was chosen as the Car of the Year, Michelin is expanding in Nyíregyháza ad Delphi is selling its thermal business to Mahle.
Manufacturers
The new Vitara entered serial production last week at Magyar Suzuki Corporation in Esztergom, Hungary, with the official ignition by Hungarian Prime Minister Viktor Orbán and Suzuki Corporation CEO Osamu Suzuki. The car will be made exclusively in Esztergom and it will be exported to all global markets from Hungary.
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Opel will receive a HUF 154 million training grant from the Hungarian government as a support for the company's new training centre. In exchange, besides infrastructural developments, the company will increase the number of its apprentices by 50 as well as expanding the sphere of professions available at the training centre.
The Audi TT, the German car maker's latest model manufactured at the Győr plant, has only received four stars at the Euro NCAP crash test.
In fact, the model entered European markets last year with no safety classifications. Requirements have became stricter in early-2015, which makes obtaining a five-star result much more difficult than before.
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Last week, we also tested the Suzuki Swift, the oldest model still manufactured at the Japanese car maker's Esztergom plant.
In a sales report on Hungarian car registrations it was revealed last week that the Suzuki Swift is also the most popular Hungarian-made car in the country.
Suppliers
It was announced last week that Japanese automotive companies could invest EUR 100 million in Hungary in the future. No details have been disclosed yet as part of their new communications strategy, the government nowadays tends to make announcements without actually disclosing any concrete facts.
Secretary of State Levente Magyar informed about a possible influx of Japanese capital last week. Our predictions include spring manufacturer NHK Spring and Tata in north-west Hungary as a possible location.
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Last week, Michelin announced a EUR 40 million expansion project in Nyíregyháza, Hungary. The investment will be launched this year. The project will create 100 new jobs by the end of 2017. According to Michelin, by the end of 2017 production capacity will increase to 6,900 units/day by 2017.
After GM, Harman is the second USA-based company to announce a major development project in Hungary. With a HUF 3.5 billion investment, the manufacturer of audio equipment will create 420 new jobs in Pécs, Hungary.
Delphi Automotive PLC announced last week that it has entered into a definitive agreement to sell its wholly-owned thermal business to Mahle GmbH.
A recently signed supplier contract signed by Rába and Suzuki brings the Hungarian company’s Components Unit a HUF 2 billion per year deal for the entire life-cycle of the new Suzuki Vitara.
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Last week, we interviewed the CEO of Takata's Miskolc plant, who acknowledged the performance of domestic suppliers but said Hungarian corporations lack confidence and power of initiative.
Service providers
Although there are at least three ongoing midi bus procurement projects at Budapest Transport Company, there are no signs of any signed deals.
Ferdinand Gross, celebrating its 10th anniversary this year, has announced plans to build a new logistics centre in Hungary this year.
Economy
Last week we analysed how Hungarian suppliers might benefit from a boom in the UK's auto industry.
The UK Embassy in Budapest also helps companies find their way to establish connections with UK-based manufacturers.
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The dominance of the automotive industry in Hungary's economy has been even stronger than usual. In January 2015 industrial output rose by 5.3 percent compared to the same month of 2014. The volume of industrial production in January – according to seasonally and working-day adjusted indices – was above the level of the previous month by 4.3 percent, reported the Hungarian Central Statistical Office (KSH).
KSH's data are in line with the Hungarian Investment Promotion Agency's (HIPA) analysis on the previous year. Almost half of all investments in 2014 (EUR 868 million) handled by the Agency, and almost 32 percent of all new jobs created in 2014 (3,500) are connected to the auto industry.
On Friday, the forint traded at 303.5 against the euro, returning to where it started out the week on Monday morning. On Friday afternoon, the forint dropped to 306 against the euro. The fluctuations can be explained by the European Central Bank's purchasing programme, starting next Monday.
suzuki.hu, ksh.hu, rába.hu, kormany.hu have contributed to this article
