Only in a market as agile, well-educated and competitive as Hungary can an established ecosystem, like the automotive industry, transform into its logical extension — e-mobility. The reasons OEMs, Tier 1 suppliers and R&D investors from around the world have opened operations in Hungary are the same reasons battery manufacturers and other suppliers to e-mobility solutions are investing there: access to customers, an abundance of talent and a business climate that includes the lowest business taxes in the EU — a 9% flat corporate income tax rate, for example.
In Hungary since 1898, Bosch Group has grown into one of Hungary’s largest foreign industrial employers with nine subsidiaries and nearly 15,000 employees. “Electromobility might be Bosch’s next success story: Bosch is an innovation leader in electric driving and is more broadly positioned in e-mobility than any other company — from e-bikes to trucks,” says Dr. István Szászi, head of Bosch Group’s Engineering Center Budapest (ECB). “Our experts play an active role in shaping the future — with a special focus on R&D.”
Bosch Group invested €223 million in Hungary in R&D in 2018. ECB has become Bosch Group’s second largest European research and development base, employing more than 2,700 engineers. “Our new Campus2 in Budapest will focus on R&D activity in connection with AD and e-mobility, which is in line with the global development trends of mobility solutions,” adds István.
Audi Hungaria was founded in 1993 in Győr, where it produces engines and cars for AUDI AG and other companies of the Volkswagen Group. It’s one of the largest foreign investors in Hungary with more than 12,800 employees. One of the world’s largest engine plants, Audi Hungaria produced nearly 2 million engines and 165,000 automobiles in Győr in 2019. Electric drives have been made in Győr since 2018; today, it produces 720 per day to meet increasing demand.
Audi Hungaria cites a favorable cost structure, its ideal geographical location for logistics, an already advanced infrastructure and a beneficial economic policy background. The overall framework was the most ideal in Győr, according to a company spokesman: “Győr will be one of the central production sites for electric drives. It helps facilitate the strategic transformation process that will make Audi a sustainable provider of mobility services.”
A Stronghold in the New Automotive Era
In late 2019, Samsung SDI Hungary announced the €1.2 billion expansion of its electric vehicle battery plant in Göd, northeast of Budapest. “It is now clear that Hungary will become one of the strongholds of European car manufacturing in the new automotive era,” noted Minister of Foreign Affairs and Trade of Hungary Péter Szijjártó after announcing the investment. More than 3,000 employees work at the facility.
Several factors make Hungary — and Göd specifically — the ideal location for this facility, according to the company. These include proximity to customers and ease of access to them. The plant is within 1,400 kilometers of the main OEMs it supplies. Additionally, Göd’s neighborship to Budapest ensures a strong supply of the workers it requires.
Komárom is the location of SK Battery’s first plant in Europe. One of the largest EV battery makers in the world, it commenced operations in October 2019 and has created more than 1,000 jobs to date and will create an additional 1,500 during the first phase of production. “We can reach some important OEM plants in Europe easily, enabling us to collaborate with OEMs quickly and cost efficiently,” says an SK Battery Hungary spokesperson. “The national government and Komárom’s full support was a very important factor in choosing this location. They helped us fully from the start with speedy permitting, successful recruiting activity and other measures.”
Vitesco Technologies is a leading international developer and manufacturer of state-of-the-art powertrain technologies for sustainable mobility. These include smart system solutions and components for electric, hybrid and internal combustion vehicles such as electric drives, electronic control units, sensors and actuators, and exhaust-gas aftertreatment solutions. The company is investing €100 million and will create 450 jobs in Hungary’s second largest city, Debrecen.
“The main goal was to find a location with an available, qualified workforce and a region with potential future growth opportunities,” says Lukas Juranek, Managing Director at the facility. “Debrecen is an ideal spot, where we found a very good logistics infrastructure, a supportive government environment and motivated engineers to manage our complex manufacturing technologies for electronics.”
From its factory in Budapest and the new plant in Debrecen Vitesco Technologies will deliver to European OEMs such e-mobility technologies as 48-volt electrification solutions, electric drives and power electronics for hybrid and battery electric vehicles.
“For this transformation in the automotive industry, we like to work with a diverse group of new colleagues — graduates, students and experienced engineers,” says Juranek. “In Debrecen we found a very good manufacturing base for our future business.”
This Investment Profile was prepared under the auspices of HIPA, the Hungarian Investment Promotion Agency. For more information, please visit www.hipa.hu.
Mark Arend has been editor in chief of Site Selection magazine since 2001. Prior to joining the editorial staff in 1997, he worked for 10 years in New York City at Wall Street Computer Review, ABA Banking Journal and Global Investment Technology. Mark graduated from the University of Hartford (Conn.) in 1985 and lives near Atlanta, Georgia.