Hungarian automotive industry: week 16
Week 16 in 2014 was fruitful period in Hungary´s economy and industry. Domestic bus manufacture was in the spotlight last week, but we also paid a visit to ZF Hungária´s Eger site and had an insight into EV development in Hungary.
Manufacturers
The Hungarian Kravtex-Kühne group will present a new variant of the Credo Inovell at Busexpo, to be held on April 23. The largest domestic bus manufacturer will present its latest multifunctional bus, the new Credo Inovell 12 with a wider, 2-wing passenger door.
Thanks to it's high-comfort passenger compartment and wider doors, the new vehicle is perfect for suburban and mid-distance intercity travels. For operators this means that the new Inovell alone can replace various bus types. József Stemler, the Group's Commercial Director said: most of new buses sold in Hungary are intercity buses and the Inovell 12 is the only domestic product in this segment.
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| The new Credo Inovell 12 |
The prototype of Evopro Kft.'s Modulo bus family's electric model has been presented. CEO Balázs Bodnár said the vehicle's frame is made from fibreglass composite material normally used in the aviation industry, resulting in a 50 percent weight reduction and a 25 decrease in operation costs.
The vehicle's main body only weighs 1,200kg and thanks to the composite frame, it is completely corrosion resisting, said István Wahl, CEO of Nabi-Busz Kft. at a press conference. Should mass production be required, the company is able to manufacture a bus in just two days.
It seems no week passes without any recalls: last week, BMW recalled 500 000 cars worldwide. The recall also affects cars sold in Europe.
Suppliers
The parent of ZF Hungária, manufacturer of transmission systems for commercial vehicles, is one of the world's leading automotive suppliers. We interviewed the Eger-based subsidiary's two directors, Csilla Őszi and Markus Schleier, who told us that the company is looking into opening towards domestic customers. After the interview we were shown around in the plant's production hall.
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| Factory visit at ZF Hungária |
Rába Holding Nyrt. announced that it will not be paying dividends this year. The decision not to pay dividends this year was made by the company's shareholders at the Rába's annual general meeting, approving the management's proposal published in March.
President and CEO István Pintér reminded at the event that the management won't recommend the payment of dividends until the company's debt is not lower than 120 percent of the company's EBITDA results. However, he agreed that the company's dividend policy should be reviewed every year. Rába hasn't paid dividends for over 10 years, the last time it did, they paid HUF 150 (EUR 0.50) per share.
After the modest performance seen in the past two years, the growth of Germany's economy could speed up as a result of the economic boost in the eurozone and the German domestic market, from which Hungarian companies could also profit, which means the suppliers in the automotive and machine industries have positive prospects for 2014, reported credit insurance firm Atradius. Atradius said in a statement that the market environment is still unstable so companies should choose their partners carefully.
We interviewed Vilmos Willisits Jr., the son of the founder of Intermotor Kft, who presented a Smart car converted to electric drive. Willisits, an active electric go-kart racing driver, is engaged in the development, production and sales of zero-emission vehicles.
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| Vilmos Willisits Jr. with his converted Smart car |
Service providers
Last year, 56,000 cars were registered in Hungary, up 5.8 percent from 2012. The driver of sales remained to be company purchases. Almost 70 percent of registrations were corporate purchases, although the number of fleet contracts decreased.
According to LeasePlan Hungária, the number of fleet financing contracts decreased by 14 percent, while the total financed amount went down by 17 percent. However, every sixth car sold in Hungary and every fifth company car is financed in a fleet financing scheme. The portfolio's size increased by 10 percent as a result of an increase in the average tenure period.
New companies moving to the Pécs Business Park won't have to pay property tax for five years as a result of a decision made by the general assembly of the Municipality of Pécs. Mayor Zsolt Páva said that their aim is to promote new job-creating investments in Pécs with the tax incentives. He added that he hopes the incentives increase the town's attractiveness and is able to provide a competitive advantage.
The Hungarian Investment and Trade Agency (HITA) held an economic forum entitled "Market opportunities and business relations in India, Turkey and Japan". The event was supported by the Győr-Moson-Sopron Country Chamber of Commerce and Industry.
The presenters at the forum were foreign trade officers working at the Hungarian embassies in New Delhi, Istambul and Tokyo, who provided a firsthand insight into their experiences and the characteristic features of the countries involved.
The Great Plain Regional Industry Development Cluster (Alföldi Regionális Iparfejlesztési Klaszter) and the Hungarian Investment and Trade Agency have signed a partnership agreement, supporting domestic SMEs. The partnership's aim is to help local SMEs join the supplier network of Hungary-based, mainly automotive, manufacturers and to help international companies settled in Hungary make use of the products and services of local suppliers.
We visited the West-Transdanubian Innovation Exhibition and Invention Fair (Nyugat-Dunántúli Regionális Innovációs Kiállítást és Találmányi Vásár), held on April 9. The event, held for the fifth time in the county capital, showcased the latest local inventions and patents.
Education
We made an interview with János Takács, President of the Scientific Society of Mechanical Engineering, Hungary (GTE), about the Association's mission, tasks, history and domestic engineer training and mechanical engineering in Hungary.
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| The annual general assembly of GTE with President János Takács (far right) |
Audi Hungaria's trainees showed an excellent performance at the 2014 Szakma Sztár (Skills Star) Festival. "The results show the high quality of the company's dual education programme, made available by the Audi Hungaria and several Győr-based vocational training institutes for years, said Audi Hungária's HR Director Erzsébet Knáb. Currently 250 trainees study in Audi Hungaria's dual training programme in 13 different professions.
László Parragh, President of the Hungarian Chamber of Commerce and Industry (MKIK) said that we must introduce dual training in higher education as well in the technical fields.
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We also reported on the National Conference of Mechanical and Mechatronics Engineering Students, held for the eighth time by Széchenyi István University of Győr. We asked the participants what makes them come back each year.
We reported on the 19th International Scientific Conference of Young Engineers, held by the Transylvanian Museum Society in Cluj, Romania.
The latest higher education application data were published, which show that technical fields stand out among the courses offered in higher education. It is also important to note that more students are interested in the teaching profession.
Michelberger Pál, former head engineer of bus manufacturer Ikarus, former rector at the Budapest University of Technology and Economics, a key figure of the history of Hungary's vehicle industry, died on April 11 at the age of 84.
Economy
Hungary's industrial output was 8.1% higher in February than a year earlier, driven by the automotive industry, the Central Statistics Office reported last week. According to the Ministry for National Economy (NGM), these data suggest that the Government's business incentive policy in recent years provided a solid foundation for the further growth of export and industrial production.
In the national economy, average earnings increased by 1.3%, compared to the previous year. In January-February 2014, full-time employees’ average gross nominal earnings according to the national concept amounted to HUF 226,600. reported Hungary's Central Statistical Office (KSH).
Disregarding average earnings data of fostered workers, gross earnings grew by 6.4% in the national economy, 5.4% in the business sector, 9.1% at budgetary institutions and 9.0% in non-profit institutions compared to the previous year.
Average gross earnings were HUF 239,100 in the national economy without fostered workers. In January-February 2014, full-time employees’ average gross nominal earnings in the business sector were equal to HUF 241,200.
Average gross earnings were HUF 239,100 in the national economy without fostered workers, HUF 231,800 at budgetary institutions and HUF 223,600 in non-profit institutions. Average gross earnings
of fostered workers were HUF 78,100.
The European Investment Bank (EIB) entered into a EUR 75 million loan agreement with Hungarian Development Bank (MFB), reported MFB. MFB said that the credit line will be used for the refinancing of loans provided for SMEs, local governments and within the Panel Programme.
In the first quarter in 2014, 16,675 companies went bankrupt, 30 more than in the same period last year, reported data provider Bisnode. Taking into account the number of company foundations, the number of companies in operation decreased by 0.5 percent in Q1 2014.
