Car industry woes cast aside as Automotive Hungary opens

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By Euronews
Car industry woes cast aside as Automotive Hungary opens

It is the largest event of its kind in central and eastern Europe, and is also seen as a litmus test of the state of Hungary’s economy.

Automotive Hungary which has opened in Budapest brings together Europe’s main carmakers and hundreds of international industry suppliers.

Almost 300 exhibitors are taking part, among them the four big carmakers present in Hungary – Audi, Opel, Mercedes-Benz, Suzuki – and this year for the first time BMW is there as well. The suppliers include Hungarian companies – and others from Austria, Britain, the Czech Republic, France, Germany, Poland, Slovakia and Turkey.

On everyone’s minds is the dark shadows cast by the Volkswagen “dieselgate” scandal. But it hasn’t stopped investment.

Audi recently announced 32 billion forints (100 million euros) of investment in its factory at Győr, with the Hungarian government contributing 6 billion forints (19 million euros).

“From Audi’s point of view Hungary lies geographically in an ideal place at the centre of Europe. Logistically the routes are good, we can reach our markets fast, and our suppliers are close,” said Péter Lőre, Communication Director for Audi Hungary.

Hungary obviously can’t compete with the likes of China or India in terms of costs. What it can do is play to its strengths: innovation and engineering.

Under the so-called dual education system carmakers work closely with universities, especially in towns where they have factories. Audi even finances an automotive engineering faculty at Széchenyi István University in Győr. Mercedes-Benz also supports the system and works with Kecskemét College.

Working closely with universities, carmakers have invested two billion euros in new technology over the past couple of years, according to the industry’s main umbrella group.

“If we talk about developing driverless cars, then for example Continental, Bosch, Thyssen-Presta employs hundreds of Hungarian engineers. We can say Hungary is one of the centres of developing driverless cars,” said Csaba Kilián, Chairman of the Hungarian Automotive Industry Association (AHAI).

The car industry accounts for over a quarter of Hungary’s manufacturing results. The sector has more than 700 companies, employing some 132,000 people.

Despite the economic slump, between 2009 and 2014 some 55,000 new jobs were created.

According to the Hungarian Investment Promotion Agency, the car industry was responsible for approximately a tenth of Hungary’s 3.5 percent growth in GDP in 2014.

Euronews correspondent Beatrix Asboth reported from Automotive Hungary:
“The car industry plays a major role in Hungary’s economic growth; it’s a key component of both manufacturing and exports. Every 100 jobs in the sector indirectly creates 235 new jobs. Hungary’s economy probably would not have positive growth without the car industry.”