Hungarian automotive industry: week 11

Manufacturers

The first Rába-Volvo buses have arrived. The first vehicles manufactured under the joint programme of Rába and Volvo were handed over in Pécs. The bus programme is going according to plan, reported Rába.

Audi Hungaria reported at their annual press conference that the year 2013 had been successful both from the aspect of revenues and production. Audi Hungaria closed the 2013 business year with a new record with 1,925,636 (1,915,567 in 2012) engines produced, and became one of the largest engine producers in the world.

At the same time 42,851 (33,553) vehicles rolled off the production line last year. In 2013, Audi Hungaria registered an income of EUR 5.588 billion (5.282 bln in 2012). Until now, the Ingolstadt-based car maker has invested EUR 968 million in the Győr plant, and the total value of investments since the company's foundation has reached HUF 6.735 billion. On 31 December, 2013 Audi Hungaria's headcount was 10,337 (8,663).

Suppliers

The foundation stone of Takata's new Hungarian plant was laid last week. Takata´s investment in Miskolc is an example of how the city is once again becoming an industrial and economic centre, Prime Minister Viktor Orbán said at the foundation-stone laying ceremony for the Japanese car supplier´s new plant. The Prime Minister noted that the investment by the supplier of safety equipment, primarily air bags, has been the most significant one since the Mercedes Kecskemét plant three years ago, creating approximately 1,000 jobs.

Takata: foundation-stone laying in Miskolc

AGC inaugurated their new production hall in Tatabánya. AGC Hungary Kft's new, 8,300-square-metre production unit was handed over last week at Tatabánya-Környe Business Park. As a result of the investment, an automotive window is now made in under eight seconds on the new production line instead of the previous 12. The HUF 3.5 billion investment was supported by a HUF 932 million state grant.

The European Commission has authorised €57.9 million of regional investment aid to the Hungarian company Hankook Tire Hungary Manufacturing and Trading Ltd ("Hankook Hungary") for the construction of a tyre plant in Rácalmás, Fejér county, Hungary.

Szombathely-based LuK have not stopped in growing and are planning to hire 400 professionals.

The old location of EPCOS in Szombathely could become a new centre for engineer training as the town has purchased the property. The aim of the business is to provide an opportunity for development for both parties. The municipality's plans include industry development and the establishment of a research centre.

Automotive supplier Poppe+Potthoff has expanded their Ajka plant with a HUF 9 billion investment, supported by a HUF 1 billion grant for technological development.

The Heves County Chamber of Industry and Commerce held an automotive supplier day on March 7 with the aim to bring closer to each other the manufacturers of the region and their prospective Hungarian partners. There are several automotive companies operating in the region, such as the two subsidiaries of ZF, transmission systems manufacturer ZF Hungária Kft. and steering gears manufacturer ZF Lenksysteme Hungária Kft., owned conjointly by ZF and the Bosch group.

AGC's new production unit in Tatabánya inaugurated

Eger-based Aventics Hungary (ex-Rexroth Pneumatika) is a manufacturer of pneumatic systems for commercial vehicles, while Modine Hungária, having locations both in Mezőkövesd and Gyöngyös, is engaged in the production of supplementary cooling systems. The Hungarian National Trading House also attended the event.

A conference was held in Budapest for the member companies of the Association of the Hungarian Automotive Industry (AHAI) on tax regulation changes regarding the everyday life of the automotive industry and research and development activities. The event was held by AHAI and international counselling firm PwC.

Education

The Faculty of Transport Engineering of the Budapest University of Technology and Economy has established a company under the name BME ITS Zrt. The aim of the company is to allow the University to take part in as many R&D projects as possible as an expert. Besides, the objective of the initiative is to promote the intellectual products created at the University and make sure the educators and researchers of the University can take part in certifying projects.

Although the Faculty of Geoinformatics of Székesfehérvár will not be relocated, there will be significant changes in its operation. Óbuda University plans to launch courses in engineering, electrical engineering and IT engineering.

Is it possible to stop the professionals of the future migrate abroad? How will the Hungarian automotive industry be able to reinforce its engineers? We talked with Tamás Szilasi, the advisor to the Széchenyi István University's rector, about these issues in an interview.

Gov't programme to promote electric motoring

The Hungarian Government has announced a programme to promote electric vehicles in Hungary. The Ministry for National Economy would promote electric vehicles in the country through tax allowances and subsidies. The programme, named after Hungarian inventor Ányos Jedlik, is already being developed by the Ministry, said Minister for National Economy Mihály Varga.

New Civil Code in effect

Hungary's Civil Code became effective on 15 March 2014, changing the classification of certain economic organisations. Several new contract forms are now included in the Civil Code, such as franchise, factoring and financial leasing. The Hungarian Leasing Association announced in connection with the new Civil Code that long-term and operative leasing constructions will not be terminated.

Labour market

The number of registered job-seekers further decreased in February according to the latest data published on the website of the Hungarian National Labour Office. On the final day of February, 443,600 job-seekers were registered in the database of the National Public Employment Service, 34.4 percent (233,000) fewer than in the same month in the previous year.

Export

Minister for National Economy Mihály Varga said a press conference in Budapest that Hungary’s foreign trade surplus is estimated to total EUR 7bln and exports to gain 2-2.4 percent this year. Varga added that foreign trade surplus will remain at EUR 7.0bn in 2014 as well. He said that we have to increase the presence of Hungarian enterprises in markets outside the EU. The proportion of export volume directed at these markets is currently 20-21 percent, but it could be further increased to 33 percent.

The surplus of foreign trade January managed to exceed previous expectations, but it's not certain whether this year's foreign trade surplus will be any higher than last year's. In January 2014, the exports of external trade in goods in EUR terms increased by 2.8%, while imports were unchanged compared to January 2013. The surplus on the trade balance showed an improvement of EUR 188 million compared to the corresponding period of the previous year. Hungary's export continued to be driven by the increasing output of Hungarian vehicle plants.

Production

In January 2014, industrial gross output rose by 6.1% compared to the same month of 2013 and increased by 3.1 percent compared to the previous month according to seasonally and working-day adjusted indices. It was the performance of the manufacture of transport equipment and related supplier branches that drove the increase in the volume of industrial output in January, reported Hungary's Central Statistical Office (KSH).

Industrial export increased by 9.3 percent in January compared to the same period in 2013. The export of transport equipment production, accounting for almost one third of the export of Hungary's entire export volume, rose by 27.5 percent, which is the largest growth registered among all sub-branches. KSH registered a 9.3 percent growth in the manufacture of medium-sized basic metals and fabricated metal products.

Companies

According to a report by Bisnode, the number company bankruptcies in Hungary grew by 24.3 percent in 2013 compared to the previous year. The number of company bankruptcies in 2013 amounted to over 36,000. On average 3,000 companies were liquidated every month, which means 100 bankruptcies every day. Csongrád County saw the least amount of liquidations, while the largest proportion of company bankruptcies was regitered in Nógrád, Fejér and Borsod-Abaúj-Zemplén Counties.

Forint

The Hungarian forint fluctuated all week, but remained in the 312-314 zone against the euro. On Friday afternoon, Hungary's currency dropped as low as 315 versus the euro.

In January this year, consumer prices were 0.1 percent higher year-on year and compared to the previous month as well. The weak forint will not endanger the inflation-target of the National Bank of Hungary (NBH) or its financial stability, however, risks as a result of the market instability caused by the crisis in Ukrain are higher. Analysts say that NBH's rate-hikes could slow down or even stop.

Fuel prices

Fuel prices decreased twice last week. Petrol and diesel prices went down by HUF 6, and HUF 3, respectively.

The Prime Minister's Office and the Central Statistical Office contributed to this article.