Hungarian automotive industry: week 13

Manufacturers

Frank Klein, the CEO of Mercedes-Benz Manufacturing Hungary Kft., will soon return to Germany to fill in the position of director of global transporter manufacturing at Daimler from April 1. As a farewell, he held an extraordinary round table meeting where he reminisced about the previous period and announced new decisions in connection with production at the Kecskemét plant.

Audi A3 Cabriolet

For the first time ever, a cabriolet version will be made of the Audi S3. The new model will be manufactured at the Audi Győr plant. We tested the new 300bhp beast. We also tested the 231bhp Audi S1 on ice and asphalt as well.

From a visual standpoint alone, the Audi S3 Cabriolet cuts a sporty figure. It is 4.43 meters (14.53 ft) long, has a wheelbase of 2.60 meters (8.53 ft), and is 1.79 meters (5.87 ft) wide and 1.39 meters (4.56 ft) tall. The open-top four-seater has a soft top with an electrohydraulic drive.

Magnesium, aluminum and high-strength steel keep its weight low. A highly insulating foam layer in the roof reduces the noise level in the interior. The top is available in three colours. It opens or closes even while driving at speeds up to 50 km/h. An active rollover system protects passengers in the event of an accident.

Audi S1

All the modifications to the Audi S1, including the new four-link rear axle, the quattro permanent all-wheel drive and the powerful 2.0 TFSI producing 170 kW (231 hp) and 370 Nm (272.90 lb-ft) of torque make it agile and dynamic. The two-litre engine accelerates the Audi S1 and the S1 Sportback from 0 to 100 km/h (0 to 62.14 mph) in 5.8 and 5.9 seconds respectively, to a top speed of 250 km/h. Even in sixth gear the sprint from 80 to 120 km/h (49.71 to 74.56 mph) takes only 6.5 (6.6) seconds, and there's a significant feel of acceleration even at 160-170 km/h.

The true, deep sound of the TFSI engine can be appreciated the best if dynamic mode is selected on the Audi drive select dynamic handling system. The driver can also use Audi drive select to alter the sound – courtesy of a sound actuator which boosts the intake noise, and a variable flap in the exhaust system which opens at high load and speed. Maximal performance is reached at 6,000 revs, while the limiter kicks in at 6,800 revs.

Suppliers

Hungary's biggest competitive advantage is speed, said Prime Minister Viktor Orbán at the inauguration ceremony of Knorr-Bremse Fékrendszerek Kft.'s new plant in Kecskemét, Hungary. We were able to be quick because we were unified, Orbán added. Quoting Heinz Hermann Thiele, the President of Knorr-Bremse's supervisory board, Orbán said that the company will soon start the construction of a new plant in China.

Knorr-Bremse lays foundation stone of new production unit

Denso will carry out a HUF 29 billion investment at their Székesfehérvár plant, announced Jiro Ebihara, the President of Denso Manufacturing Hungary Ltd., in a press conference held with Prime Minister Viktor Orbán. The investment will create 500 new jobs.

Phoenix Mecano has announced a HUF 1.5 billion investment in Kecskemét. Mechanical and electronics systems manufacturer Phoenix Mecano will carry out a research and development project in Kecskemét. Last week did not only see giant investments and inaugurations as small companies also announced significant investments.

Ples Zrt. has established an automotive R&D and national wheel safety testing and certifying centre in Borsodnádasd, Hungary, with an investment of HUF 1.5 billion.

KSH Rugógyár handed over an investment of HUF 400 million last week. As a result of the investment, the company, employer of nearly 70, has moved to a new, 2,900-square-metre production hall from the previous leased production site.

Automotive parts manufacturer Veritas Dunakiliti Kft. have bought production and IT equipment and carried out infrastructural investments with a HUF 250 million project.

Service providers

Hungarian carrier companies managed to stand their grand during the economic crisis and increased their performance, but to achieve that they needed the Hungarian government's incentive activity, said György Wáberer, CEO and President of Waberer's International Zrt. at the inauguration ceremony of the company's latest investment in Budapest. The Group's fleet has been expanded by 500 lorries and the company hired an additional 600 employees.

Waberer's handed over their latest investment in Hungary

Education

One of the hot topics of Hungary's automotive industry at the moment is the launching of engineer training in Szombathely. We try to interview as many of those concerned as possible: we started off by interviewing the CEO of BPW Hungária. József Brumbauer told Autopro that we have to train 800 new engineers in five years.

Dirk Saller, the Rector of DHBW Mosbach (Duale Hochschule Baden-Württemberg Mosbach), visited Széchenyi Istán University and exchanged ideas about the cooperation between economy and higher education with the leaders of the University.

Employment

The rate of employment continued to grow in the period between December 2013 and February 2014, reported Hungary's Central Statistical Office (KSH). In the observed period, the number of employed people was 4.053 million, 236,000 more than a year ago. The employment rate of people aged 15-64 increased to 60.4%.

Forint

The Monetary Council of the National Bank of Hungary (NBH) has lowered its base rate by 10 basis points to a new record low of 2.6 percent on Tuesday, in line with the consensus forecast. The Council indicated that it will not continue the rate cuts should the international economic situation significantly worsen. Analysts say that NBH will deliver another rate cut in the near term (April, likely), and bring the base rate to 2.5 percent.

The forint gained some strength following the announcement of the rate cut. After the announcement the forint strengthened to 311.9 against the euro from the previous level of 312.2. Hungary's currency gained some strength by Friday. On Friday morning, the forint was at 310.34 against the euro, after falling to 313 on Monday. The forint even went below 310 against the euro after Standard & Poor's Ratings Services revised its outlook to stable from negative on the long-term sovereign credit ratings on Hungary.

However, 15 minutes after the announcement, the forint was back at 310.3 against the euro. According to the NBH's latest report on inflation, core inflation, reflecting basic inflationary processes in the mid-term, is influenced by low import inflation and restrained growth in nominal wages, which is why from 2015, the rate of core inflation could return to a value consistent with price stability. The report is prognosticating a core inflation of 3 percent for 2014 and a core inflation of 3.5 percent for 2015.

Fuel prices

Last week, Mol Nyrt. increased the price of diesel and petrol by HUF 2. After the increase, the price of diesel was HUF 420-421 per litre, while the price of petrol was HUF 409-410 per litre. Last week, Mol decreased the price of diesel by HUF 4 and the price of petrol by HUF 2.

Investors awarded

Takata Safety Systems Hungary Kft., Hankook Tire Hungary Kft., Coloplast Hungary Kft., Computacenter Services Kft., Systemax Business Services Kft., Mercedes-Benz Manufacturing Hungary Kft., Gyöngyös Ipari Park Fejlesztő Kft. and Fémalk Zrt. received awards from the Hungarian Investment and Trade Agency (HITA). With the award, handed out in eight categories each year, HITA acknowledges outstanding investor performance.

M&A

In 2013, the market of mergers and acquisitions (M&A) increased by almost 250 percent compared to the previous year. The number of transactions grew by 11 percent. The primary targets of investors continue to be companies engaged in IT and technology development, reported EY in their latest M&A Barometer.

The estimated value of Hungary's M&A market grew by 133 percent from USD 0.55 billion to USD 1.28 billion, while the number of identified transactions is up by 11 percent from 82 to 91. The majority of transactions were registered in the IT and technology sector (18), followed by the sector of media and telecommunications (15) and the sector of financial services (9).

Export

The total fund of Eximbank’s export refinancing credit programme (EHP) was increased from EUR 750 million to EUR 1bn, and if required, this amount can be even higher, Minister for National Economy Mihály Varga said last week.

The Minister and Eximbank CEO Roland Nátrán signed cooperation agreements with 18 domestic commercial banks on extending their existing refinancing credit contracts with preferential interest rates and tenure of more than two years which had been concluded with Eximbank within the framework of EHP.

The Minister pointed out that 500 companies have hitherto benefited from Eximbank’s preferential financing and insurance facilities and 21 credit institutions have participated in the Bank’s refinancing credit programme. Mihály Varga emphasised that since May 2012 the banking and insurance institution has fuelled Hungarian exports by providing some HUF 1000bn.

He pointed out that the bank provides assistance for Hungarian enterprises through several new options, such as the financing of supplier activities, export-oriented investment projects and the export of services.

Kormany.hue and Audi.mediaservices contributed to this article.