Hungarian automotive industry: week 22

Manufacturers

The Kecskemét-based Mercedes-Benz vehicle plant was forced to halt production due to a bomb threat for the third time in May. The threat was once again groundless, and two days later the company had a striking response to the threats: Thomas Geier, the factory's new CEO was introduced and the company reported on excellent performance figures in 2013 and ambitious future plans.

Thomas Geier, the new CEO at Mercedes-Benz Kecskemét

In 2013, the Mercedes-Benz plant registered a net income of EUR 2.1 billion, up from EUR 0.9 million registered the year before. Click here for our full report featuring a gallery from the press event.

The hottest piece of news last week involved the new Ikarus buses. As a partner of BKV (Budapest Transport Company), the body and parts are supplied by Magyar Autóbuszgyártó Kft. Up until recently we'd known very little about the details of the production process, but CEO Gábor Liptai gave an insight into the background of what seems to be the revival of Hungary's bus manufacturing.

The Association of Hungarian Automotive Industry held a general meeting last week, where president István Pintér was re-elected and the Association's name was changed.

The latest announcement of Toyota's deputy chief is worth paying attention to. Nobuyori Kodaira gave an interview to the Wall Street Journal, where he spoke about the possibility of a new global crisis, which is why the Japanese company won't be building another factory until 2016.

This seems to be a risky strategic move, considering that all the competitors are currently expanding. It's difficult to see who is going to win but the "less is more" approach could easily pay off in the long run.

The Ikarus-deal could bring about the revival of Hungary's bus manufacture

Two weeks ago we analysed the Alstom deal, saying that new changes can still be expected in the coming weeks. We didn't have to wait for very long: American General Electric bid higher, promising to create 1,000 jobs by purchasing the French company's energetics business.

We'll soon be able to meet the latest Hungarian-built Audi on our roads. Audi is planning to launch the the third-generation TT in Europe in the autumn. According to the company, Hungary will be among the first countries where the new model will be available for purchase.

Although not related to Hungary, we're obliged to mention the possible end of Lancia. The legendary Italian marque was sentenced to death by Fiat Chrysler chief Sergio Marchionne, who said the brand will likely to be limited to sell cars only in Italy. In turn, however, Alfa Romeo may be saved as a result of a partnership with Chrysler.

Hungary's going to be among the first countries in Europe to start selling the new TT

Suppliers

The 1 millionth start-stop unit rolled off the production line at Continental's Budapest plant. The start-stop system has been in production in Hungary since the autumn of 2010.

Global navigation systems developer NNG received another international award: the Hungarian company won the European Business Award for Growth Strategy of the Year. NNG was selected out of 17,000 contenders.

The restructuring programme of Siemens will affect 11,600 jobs worldwide, announced CEO Joe Kaeser in New York at an investors' conference.

Service providers

Most people association Hungarian vehicle manufacturing with Győr, Kecskemét or Esztergom. In recent years, however, Tatabánya is claiming a position among the top automotive locations in the country. We interviewed mayor Csaba Schmidt about the town's progress and efforts to become one of Hungary's centres of automotive production.

Róbert Keszte, the CEO of Continental Automotive Hungary Ltd., and State Secretary Péter Szijjártó with the 1 millionth start-stop unit

György Péczely, the president of the Hungarian Association of Industrial Maintainers (MIKSz) answered our questions regarding the sector.

Beck & Pollitzer, established in the UK 150 years ago, contributed to the majority of factory constructions in the second half of the 20th century. "When just over ten years ago, we opened an office in Hungary. We arrived at a very important period as back then several international projects were under way," said László Kormos, CEO of the company's Hungarian subsidiary.

A HUF 1 billion development project is expected in transport. Transport cooperation between the Visegrád Four countries helps raise the competitiveness of the region, Hungary's Minister for National Development, Zsuzsanna Németh, said at the meeting of chief executives of the Czech, Hungarian, Polish and Slovak railways in Balatonfüred.

The chamber of engineers is protesting against the compulsory membership in the chamber of industry. The organisation pointed out that the legislation on economic chambers prescribed all sole proprietors and partnerships to register at the Hungarian Chamber of Commerce and Industry (MKIK), and MKIK is suggesting to convert the registration into a mandatory membership.

Last week we reported on the Industrial Days exhibition, featuring Hungary's latest and most innovative products. This year, the number of exhibitors increased by 15 percent compared to the previous event. The Industrial Days grand prizes were also handed out at the event, held at Hungexpo Fair Center.

Software developer EuroSolid doesn't want to compete with cheap Eastern workforce. The automotive industry is a multifaceted sector, everyone is taking part and contributes in a somewhat different way, said CEO Csaba Zombor in an interview with our site.

GYSEV Zrt.'s completely renovated engine workshop was handed over in Szombathely. The renovation project, supported by a state subsidy, cost nearly HUF 300 million, said GYSEV spokesman László Rázó. The company is now able to perform the maintenance of Flirt trains.

Education

The theory that technical fields are favoured by men seems to be proven wrong: more and more women are studying vehicle engineering. The dominance of men is still prominent, however, the proportion of women is growing significantly. We interviewed Annamária Pap, a vehicle engineering student.

Szombathely-based companies are guaranteeing the success of local engineer training with undertakings and contracts and employment obligations, said deputy-mayor Miklós Molnár in an interview with our site.

Economy

In May Economic Sentiment rose in the euro area (18 member states) and remained broadly stable in the EU (28 member states). In May the Economic Sentiment Indicator (ESI) rose in the euro area (by 0.7 points to 102.7), following its almost tantamount decrease in April. In the EU, the headline indicator remained broadly stable (+0.2 points at 106.5).

In May, the industrial confidence indicator was at -1.8 points, the service confidence indicator at 8.2 points, the consumer confidence indicator at -4.1 points, the retail trade confidence indicator at 4.1 points, while the construction confidence indicator was at 25.6 points. It's important to note that with 118.8 points, Hungary has had the highest ESI index in the whole EU for the fourth consecutive month. Hungary was followed by Great Britain with 118.6 points.

In their latest forecasts certain London-based financial analysts increased their projections for economic growth in Hungary and Poland for 2014 thanks to better results in the second half of last year and Q1 2014.

Last week the forint was 303 against the euro. After fluctuating between 302 and 305 against the euro all week, Hungary's currency returned to the level registered on Monday. This further increases the possibility to get below the 300-barrier against the euro shortly.