Hungarian automotive industry: week 30
Last week saw a surprise rate hike, an conference on the UK automotive sector in Budapest, massive lay-offs and favourable prospects in Hungary´s auto industry, while foreign economy was characterised by a deepening crisis in Ukraine and a more and more alarming situation in Gaza.
Let's look at what happened in week 30 this year.
Manufacturers
Three factors, localisation, standardisation, expansion, are contributing to the success of European car manufacturers, including companies and suppliers building production capacity in Central Europe, Armin Krug, expert of global advisory firm PwC, said at an innovation held last week at the British Embassy in Budapest.
"I have good and bad news. The bad is that European car sales won't reach the levels registered before the crisis before 2020, the good news is that it will come close as development is unbroken in Central Europe," said PwC Hungary partner Armin Krug.
Risk assessment
International credit insurance firm Coface has maintained Hungary's credit rating. Hungary's credit risk rating has been maintained at B. This means that Coface considers Hungary's achievements favourable but still sees viable risks in the country.
Coface's experts pointed out that the economic situation and prospects have improved, Hungary's real GDP growth was 3.2 percent in the first quarter compared to the same period in the previous year, a level of increase unseen since 2006. Hungary's export has increased thanks to a visible livening in the eurozone and the growing capacity of Hungary-based car OEMs.
Production of new Audi TT launched
A good example is Audi, where mass production of a new a model has been launched just last week. On July 24, mass production of Audi TT and TTS Coupé cars was launched at Győr-based Audi Hungaria Motor Kft. Following the production of the A3 Sedan, the S3 Sedan and the new A3 Cabriolet, serial production of the new Audi TT has now started at the German premium car maker's Győr plant.
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| Mass production of Audi TT launched in Győr |
Each model's complete production is now carried out at Audi's newly-built factory. Production at the Győr-based plant will reach full capacity with the launch of the third shift, and in the next few years, new engine variants will be introduced at the factory, said Axel Strotbek, Audi AG board of directors member responsible for finances.
On July 22, Audi Hungaria laid the foundation stone of a project to expand its training centre. The HUF 5 billion investment was opened by Thomas Sigi, Audi AG board of directors member responsible for human relations.
Hybrid Volvo from Rába
Rába Vehicle Ltd. signed an agreement about the delivery of 28 diesel-electric hybrid buses equipped with the most modern vehicle technology with T&J Busz Projekt Kft., a subcontractor of BKK, the public transport system of Budapest.
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The new, low-floor, air-conditioned Volvo 7900 buses, equipped with the most advanced Euro6 engine, will be utilised in inner city bus services from early-2015.
Suppliers
The Government concluded a strategic partnership agreement with German transmission systems manufacturer ZF Hungária Kft. The document was signed in Budapest in the Parliament last Tuesday. The four main areas covered by the agreement are expansion of the Hungarian supplier base, production development based on research & development, the increase of employment, and development of the system of vocational training.
Forint
The Monetary Council of National Bank of Hungary (MNB) has lowered its key policy rate by 20 basis points to a record low of 2.10% on Tuesday contrary to previous expectations. The market had projected a 10bp cut and one or two more such reductions before the end of the easing cycle. The Monetary Council also announced the end of the monthly cuts, reducing the base rate by 4.90 percent from 7.00 percent since August 2012.
Thanks to this unexpected turn, the forint dropped against the euro, while the announcement regarding the end of rate hikes resulted in an increase. On Tuesday, the day before the rate hike, the forint was worth 309.20 against the euro, while after the announcement it dropped to 310. On Friday, the forint climbed back to 307.8 against the euro.
MKB
The Hungarian state has purchased MBK Bank from Bayerische Landesbank for EUR 55 million. Economy Minister Mihály Varga said the transaction was the first step in the consolidation of the banking system, and he assured that this step will not jeopardize the 3 percent GDP-adjusted credit rate increase planned for this year.
