Woes of the auto industry put the car side Hungary opens
The automotive market in Central and Eastern Europe - Hungary - EY - Global.
The automotive market in Central and Eastern Hungary.
With only 9 9 million inhabitants, Hungary can not offer sales opportunities that many other central European countries can.
Before 1990, Hungary has been involved in a major truck and bus production with national brands Ikarus and R ba Automotive Today, R provides three strategic markets ba EU, the United States and the Community of States independent CIS mainly axles and chassis, and other components.
After the dissolution of the Eastern bloc, the three global automakers established themselves in the country with Suzuki, Opel, Audi and related components from suppliers, the automotive industry has become the main pillar of the Hungarian manufacturing.
However, since then, Opel has shifted its focus to the production Powertrain Hungary has not lost its attractiveness as Daimler AG Daimler decided to open a factory in Kecskem t, 86 kilometers from Budapest, for manufacturing new compact models in the near future.
As for the production of parts, Hungary focuses primarily on GM building engines and Audi have created large plants with the same focus, and Suzuki announced similar plans beyond a supplier base for other parties present, and led mainly by the existence of global automakers Historically, Hungary was the basis for the production of components for delivery to the domestic commercial vehicle industry but also to the Russian manufacturer AvtoVAZ.
Figure 19 Sales and production units from 2008 to 2012.
Figure 20 light vehicle sales and production compared in units, 2006 09.
As a domestic producer, with a 28 market share in 2009, Suzuki advantages of local production also enjoys the focus on small cars, like the Hungarian population tend to buy affordable cars like those produced by Suzuki, however, with only 9 9 million inhabitants, Hungary can not offer sales opportunities that many other central European countries can.
With the Hungarians cars with an average age of over 11 years, more than 3 million people could replace their vehicles in the coming years more, with a car density of 360 vehicles per 1,000 people, Car Demand became evident new car sales increased continuously between 1996 and 2006.
But after 2006, the purchasing power of population has been severely affected by a political crisis In addition, the attractiveness of Hungary for manufacturers in the automotive industry is not the domestic car market, but infrastructure and traditions the industry that the country offers.
As a manufacturer of affordable cars, Suzuki held the dominant share of the market for the last 11 years, the Japanese automaker is committed to cooperation initiatives with other companies in Hungary to expand its capabilities.
In 2003, the company decided jointly with Fiat to build SUV for the two marks which are identical in construction, namely the Suzuki SX4 and Fiat Sedici In addition, Suzuki began assembling the Opel Agila and Splash production Suzuki in 2008.
Both are also based on the same platform Audi Hungaria has one of the largest engine production facilities in the world, which is located in Györ In 2008 the Hungarian plant produced nearly 2 million engines to provide all Audi models and other VW both in Hungary and in other countries in addition, the high-end models, stroke and TT Roadster, were assembled in Gyor since 1998.
In 2007, the A3 Cabriolet, which is based on the same platform, was added to the mounting portfolio Lately, Audi has announced plans to increase investment in its engine R & D facilities Installation of GM Powertrain in Szentgotth supplies rd different GM brands in Europe Daimler will start production of the new generation Mercedes-Benz A and B class models in Hungary in 2012.
This decision was influenced by, among others, the advantage of labor costs, an appropriate portfolio of suppliers and logistics infrastructure practical compact model of production is very important to Daimler, which attempts to meet the tastes of potential customers Eastern these customers tend to prefer B and C1 segments Daimler is also focused on strengthening these segments across Europe.
Figure 21 light vehicle sales by brand in units, 2007 and 2009.
Figure 22 production of light vehicles by brand in units, 2007 and 2009.
Hungary began economic reforms in response to the decline at a relatively early stage and then benefited from a flow of foreign direct investment, however, Hungary faces economic conflicts even before the current recession, the government managed to stabilize requesting financial support from the International monetary Fund IMF in late 2008.
However, the global recession then hit Hungary again and left the financial system and the currency with great concern the high level of external debt, as well as overall economic vulnerability have forced the government to take measures to reduce the This costs in 2009 will have a negative effect on the slowdown in domestic demand already.
Until 2006, Hungary received almost 33 FDI in whole Central and Eastern Europe that flows Now the government made an effort to improve the attractiveness of Hungary for foreign investment again by shifting the tax burden of corporation tax to VATs.
As for automobile production in particular, Audi suffers more as a leading Hungarian exporters, due to its role as a high-end car manufacturer and as an engine supplier to regions affected by the crisis in Europe on the other side, as the beneficiary of up to foreign scrappage schemes, Suzuki has absorbed some of the negative effects on the sector However, even Suzuki, a maker of high-volume production, has faced difficulties and suffered from diminishing returns.
Looking to suppliers investments, Apollo, a manufacturer of tires in India, recently reversed its intention to establish a new plant in Gyongyos However, Hankook Tire, a South Korean supplier, will increase investment in its only European factory in Hungary, with the intention of increasing its capacity and market share in the tire industry in Europe by 2011.
Like the other new member states of the EU, it will maintain its local currency for a transition period before the introduction of the euro and participation in the European Monetary Union.
At the beginning of the financial crisis, the forint depreciated sharply, but there was value wins regularly in recent months.
The devaluation of the forint against the euro made Hungary relatively cheap for euro-based economies This proves to be a competitive advantage against Slovakia, where the automotive industry is also strong.
The relatively high level of external debt and the strong export orientation of relatively low market make the fragile Hungary, especially in the face of the global recession and changes in exchange rates.
However, Hungary has managed to obtain financial support of about 20 billion euros of international organizations to provide international liquidity and financial stability This should help investor confidence That said, reforms still need to be implemented to reduce the deficit budget.
The Hungarian economy is relatively mature compared to other CEE countries; its legal system in line with Western standards, providing strong protection for investors.
Hungary is among the most developed countries of the former Eastern Its economy is more mature and becomes more stable than the phase of emerging markets is ongoing.
The privatization and efforts to attract foreign direct investment, combined with historical and cultural ties to the old monarchy of Hungary, have helped the country to develop rapidly after the Eastern countries became democratic in the 1990s.
Hungary has reformed its legal system in preparation for accession to the EU and is in compliance with Western standards in almost all material respects.
Megyeri Bridge Megyeri Hid Hungarian spans the Danube between Buda and Pest.
Hungary is geographically well positioned to take EU enlargement party in the Adriatics.
Hungary is likely to benefit more and more central to the EU region the Adriatic region, which borders Hungary to the south, is less developed, and Hungarian companies could have a competitive advantage in their proximity and other neighboring emerging markets.
Compared to the Czech Republic and Poland, for example, Hungary still offers all levels of the hierarchy relatively low wages, particularly in the blue collar sectors.
There are Eastern European countries with labor costs, such as Romania, but according to Eurostat, labor productivity is higher in Hungary.
Hungary has also been praised for the skill level of its workforce This was one of the factors mentioned Daimler regarding its decision to Hungary as a production base.
In 2010, the employment tax has been simplified so that employer contributions will be reduced by 5 to improve the employment rate and labor costs.
The automotive market in Central and Eastern Europe Hungary EY, Central, Eastern, European, automotive.