HungarianInvestment andTrade Agency

Automotive Industry in Hungary

2014

Hungary: home of automotive investments

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

• Audi Hungaria Motor Kft. in Győr produces engines for all brands in the VW Group and has a brand new production plant for A3 Cabriolet and A3 Limousine, together with the new generation of TT Coupé and TT Roadster.

• Mercedes-Benz Manufacturing Hungary Kft. has picked Hungary as its first plant in Eastern Europe, producing the Mercedes B and CLA models.

• Magyar Suzuki Zrt. has assembly lines in Esztergom, producing Suzuki Swift, Splash, SX4 and SX4 S-Cross.

• Opel Szentgotthárd Kft. produced Opel Astra cars at the beginning, afterwards they manufactured engines, cylinder heads, crankshafts and piston-rods.

Overview: major OEMs in Hungary

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

Foundation: 1993Products: TT Coupé/Roadster, A3 Cabriolet/LimousineCar. prod. cap.: 125.000Engine prod. cap.: 1.900.000Nr. of employees: 10.300Revenue (2012): EUR 5,282 billion

AUDI Hungaria Motors Kft. Location: Győr

Foundation: 1991Products: engines, cylinder heads, gearboxesEngine prod. cap.: 1.000.000 (2015)Nr. of employees (expected): 1000 (1,500 - 2015)Revenue (2012): EUR 86,7 million

General Motors Powertrain (GM)Location: Szentgotthárd

Foundation: 1991Products: Swift, Splash, SX4 S-Cross Car. prod. cap.: 300.000Nr. of employees: 3.100 Revenue (2012): EUR 1,4 billiion

Magyar Suzuki (Suzuki Motors)Location: Esztergom

Foundation: 2008Products: A and B Class, CLACar. prod. cap.: 150.000Nr. of employees: 3.000Revenue (2012): EUR 0,92 billion(Operation started in March 2012)

Mercedes-Benz Manuf. (Daimler)Location: Kecskemét

SzentgotthárdSzentgotthárd

GyőrGyőrEsztergomEsztergom

KecskemétKecskemét

TatabányaTatabánya BUDAPESTBUDAPEST

MiskolcMiskolc

SzékesfehérvárSzékesfehérvár

PécsPécs

SzegedSzeged

SzolnokSzolnok

DebrecenDebrecen

NyíregyházaNyíregyháza

HatvanHatvan

SzombathelySzombathely

Facts and figures

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

• Production value : 19.4% of total industrial production

• Automotive industry gives 20% of Hungary’s total exports (16,65 bn EUR in 2012 )

• Main export market: EU (75 %)

• No. of companies: cca. 700

• No. of employees: cca. 115,000

• Average gross salary: 824 EUR/month (Eurostat, 2013 June)

• Forecast: more than 2,3 million engines and 400.000 passenger cars will be manufactured in Hungary in 2014

Top reasons for Hungary I.

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

• Central location

At the crossroads of 4 main European transportation corridors - Ideal logistical center for the automotive industry (More than 90% of Hungary’s automotive production goes for export)

• Cost efficiency

Competitive wages and labor cost/value ratio in European comparison in the CEE region.

• Tradition of innovation

Long and successful tradition of cooperation between the universities and the producers in R&D.

• Long-term planning Solid political and public institutional framework Stable economic outlook Harmonized tax system

Competitive average wages

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

Source: wiiw, Eurostat, national statistics

High average yearly working hours (2012)

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

Gross wage levels in European cities

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

Source: UBS, Wealth Management Research, Prices and Earnings, 2012 September

New York=100 (2012)

Automotive competence centers

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

• Győr (engine, vehicle manufacturing)

• Veszprém (mechatronics, fuels and lubricants)

• Budapest (vehicle technology, electronics, mechatronics)

• Kecskemét (material sciences, vehicle assembly)

• Miskolc (driveline systems, mechatronics)

Competencies in the Regions – Alignment of the Academic and Industrial Main Priorities

Top reasons for Hungary II.

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

Strong supplier base:

•Over 700 companies in the automotive sector

•15 of the 20 leading Tier 1 companies settled down in Hungary

•Hungarian automotive suppliers have several years of experience supplying OEMs & Tier 1s

•Strong governmental supplier development activity •Extended vertical and horizontal supplier connections

Hungary: home of automotive investments

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

Tier 1Tier 1 Tire man.Tire man.

R&DR&D

And many more…

And many more…

OEMOEM

More than 700 suppliers

Central Transdanubia

Western Transdanubia

Central Hungary

Southern Transdanubia

Southern Great Plain

Northern Great Plain

Northern Hungary

AFL KirchhoffAjkai Elektronika Lé BelierAlbert Weber LearAlcoa MagyarmetAsahi Glass MichelsBenteler MusashiBorg Warner PlasticorBourns PlastimatBridgestone Poppe+PotthoffContinental Autom. RábaDenso SCI SanminaDiamond Electric SCSEuro Excedy SEWSGedia SuoftecGestamp Toyo SeatHammerstein U-ShinHankook ValeoITW Siewer VideotonJohnson Controls VisteonKarsai Plast Wescast

Arcelor Győri PlastAutoliv HirschlerB.O.S. KravtexBPW Rába Luk SavariaCar-Inside Magna SteyrDana NemakDekorsy RábaDelphi RehauEdag Rekard ProduktEMT Rudolph LogistikErbslöh SemperformEuro Exedy VeritasEuro Elzett SMRFederal Mogul Vogel und Noot

BHGCabTecRatipurInterplus

Brose Johnson ControlsContiTech Fluid KALOplasticContiTech Rubber Knorr-BremseCsaba-Metál Kunplast-KarsaiEckerle LinamarEmika Magna ExteriorsEuroFit PataFreudenberg Phoenix MecanoHirschmann ThyssenKruppHBPO Zorge

CaroflexCarrier TransicoldEagle OttawaEismannFAG (Schaeffler)FaureciaEuroszolF.SeguraHajdu AutóHaldexHübnerIsringhausenJász-PlasztikLé BelierMichelinNiefPhoenix

Akzo Nobel Coatings Firth RixsonARRK Ganz FoundryBosch GibbsCSABAcast Hi-LexDelphi Knaus TabbertDelta-Tech KovácsExir Lear

LeoniMitsubaModinePrec-CastRemySaia-BurgessSalgglasShinwaStanley ElectricStarter BatteryTechnoplastZF

AVL Hokushin Siemens VDOCascade Ibiden TaurilClarion Lear ThyssenKruppContinental Autom. MGM Toyo SeatContiTech Fluid Michelin Vogel SitzeDraexlmaier Mono-Ipolyfabric WebastoEMT NABI W.E.T.Excel Csepel PEMÜ ZollnerFESTO SchwarzmüllerGE Lighting Semcon

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

Source: Ernst & Young, The Central and Eastern European automotive market, 2010

Light vehicle production in the Central and Eastern European Region (in thousand units)

About the Hungarian Investment and Trade Agency - HITA

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

• Support the foreign trade activities of Hungarian undertakings

• Training of SMEs enabling them to be involved into multinational companies’ supply chain

• Organizational Structure

Investment Promotion Directorate Business Development Directorate Enterprise Europe Network (EEN)

• Founded by the Hungarian Government in 2011, in order to assist in achieving its external economic policy goals

• The supervising body of HITA is the Prime Minister’s Office

• 150 employees, mainly consultants on sectorial basis

Our main tasks are:

Our services for successful investments

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

Project partner and project financing advisory

Supplying information on permitting procedures

Assistance in applications for incentives

Expansion assistance Advocacy to improve the

business climate

Operations Tailored and comprehensive

information packages on the economy, financial incentives, business environment, tax

Assistance in location search and evaluation, site visits organized

Partner meetings organized

Ramp-up Pre-decision

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

Our services for successful investments: Incentives

Services of the Incentives Department:

•EU co-financed tenders

•Subsidy based on individual government decision

•Development tax allowance

•Job creation subsidies

•Training subsidy

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

Our services for successful investments: Supplier Department (I.)

•Regular personal meetings with management for setting up and reviewing supply

strategy and project plan

•Longlisting business contacts about possible Hungarian suppliers

•Parametering the possible Hungarian suppliers

•Prefiltering business contacts for the OEMs

•Shortlist business contacts to maximize the chance of the successful cooperation

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

•Match-making between the OEM and the suppliers

•Business Seminars, Conferences, Supplier Days, Shows & Exhibitions

•On request establishing business relationship

•On request consultancy with other governmental organs

•Follow-up meetings

• Building interactive supplier database and e-market service

Our services for successful investments: Supplier Department (II.)

Thank you for your kind attention!

H-1055 BUDAPEST, HONVÉD UTCA 20. PHONE: (+36) 1 872 6520 FAX: (+36) 1 872 6699

Contact us:

Web:www.hita.hu

E-mail: investment@hita.hu

Phone: +36 1 872-6520