Automotive Industry in Hungary

1
Automotive Industry in Hungary
2
Main topics covered

• About the automotive business in Central- and
  Eastern Europe
• Facts and figures on the Hungarian automotive
  (parts) industry
• The largest automotive companies in Hungary
• About Clusters General introduction of the
  concept
• The Pannon Automotive Cluster (PANAC)
• The goals of PANAC
• The company network of PANAC

3
Central East European concentration of OEMs
(car and engine plants)

• By 2006
• Approx. 4-5 million cars in CEE
• Approx. 900.000 cars within 120 km of Györ
• Approx. 2.5 million engines within 160 km of Györ
• Approx. 3.5 million engines within 300 km of Györ

?
4
Automotive investments in Eastern-and Central
Europe
Gliwice Opel (General Motors) New factory,
Current production 85 700 cars, Extension
planned M 500 Investment
Poznan Volkswagen (VW) Existing factory for 40
000 commercial vehicles, Under further
development, M 600
Tychy Daewoo New factory, current capacity
25 000 cars, under further development, M 400
invest
Warzawa Fiat New factory for currently 158 000
cars, Under further development M 1 000
investment
Mladá Boleslav Skoda (VW) Existing factory for
442 500 cars
Zilina Hyundai, Kia New factory for
2005 Capacity 300 000 cars M 7001 100
investment
Kolin PSA and Toyota New Factory for 2005 300
000 Cars
East Slovakia Rover New investment in preparation
Bratislava Volkswagen (VW) Current operations
225 400 cars Porsche Cayenne, Touareg, Polo,
Golf, under further development
Trnava PSA (Peugeot/Citroen) New factory for
2006 Capacity 300 000 cars M 800900 investment
Györ Audi (VW) Current operations 1 600 000
engines and 53 600 cars under further development
Esztergorn MSK (Suzuki) Current capacity 84 600
cars By 2005 capacity 200 000 cars
Novo Mesto REVOZ (Renault) Current operations
125 700 cars Under further development
Pitesti Dacia (Renault) Current operations 57
300 cars
Sources Die Zeit, Der Spiegel, FhG-IPA, own
sources, company information, EU
5
The Hungarian automotive sector in Numbers

• Production Value
• 6.44 Billion USD (2001), approx. 9 Billion in
  2004
• 14 of the total Industrial Production 31 of
  the machining industry
• Total number companies 280-300, approx. 350 in
  2004
• Number of companies with system certificates
  240 companies
• Advanced automotive systems in place 120
  companies
• Total number of employees 90.000 people
• Export ratio above 90
• Most important export market European Union
• Significant ratio of foreign ownership above 80
  
• Approx. 10 of the total FDI, approx. 10 billion
  Euro in automotive field

6
The Hungarian automotive sector in Numbers

• Car and engine production _at_ Hungary
• Car manufacturing, assembly
• Magyar Suzuki Rt, ill. Audi Hungária Motor Kft
• Suzuki approx. 100.000 pcs 2005 approx.
  240.000 planned for 2005
• Audi TT, earlier A3 and S3, yearly 35-40.000 pcs
• Engine manufacturing
• Audi Hungária Motor Kft. 1.400.000 engines per
  year
• Opel Magyarország Kft. 400.000 engines per year
• Regional engine production concentration!!!

7
Key indicators of the Hungarian automotive parts
sector
Positions in the supply-chain
Ownership structure
Modules, systems
Parts, components
Local
Foreign
Mixed
Distribution of technology
Level of technology at the companies
Turning/Machining Pressed parts Electronic
parts Plastics parts Rubber parts Sprins, screws,
etc. Casting Other
Advanced tech.
Other
World class technology
8
Most important automotive companies in Hungary
32
5
28
1
12
9
35
16
36
42
7
15
34
57
59
22
33
47

• 1 Akzo-Nobel Coating, Paints
• 2 Alcoa, Alu-casting, Rolling
• 3 Audi, Engines, Cars (TTs)
• 4 Bakony Muvek, Dashboard, sceen-wiper
• 5 Bosch, Dashboard, contoroll units, horn
• 6 BPW, Carriage, suspension
• 7 Daewoo Ball Bearings, Ball bearings
• 8 Daikin, air-conditioners
• 9 Delphi- Calsonic, Compressors
  (Air-conditioners)
• 10 Delphi-Packard, Wires, Cables
• 11 Denso, Injection systems
• 12 Delco Remy, Barring engines, Generators
• 13 Excel-Csepel, Production machines
• 14 Erbslöh, Alu profiles manufacturing,
  assembling
• 15 Firth Rixson Forgings, powder metallurgy
• 16 Federal Mogul, Rubber seals
• 17 GM Opel, Engines, cylinderheads, gear-boxes
• 18 Hydro, Alu cylinder heads, Alu engine bodyes
• 19 Continental Teves, ABS brake systems, ESP
  systems

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65
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30
14
17
48
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49
60
62
61
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8
51
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43
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20
24
38
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63
18
21
45
26
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Most important automotive companies in Hungary
32
5
28
1
12
9
35
16
36
42
7
15
34
57

• 24 LuK, Clutch, clutch disk,
• 25 Linamar (Mezögép), Fuel dosing systems
• 26 Michelin, Tyres
• 27 Mitsuba, Electrical engines, generators,
  transformators
• 28 NABI, Coaches
• 29 Nolato-Protec, Moulded parts
• 30 Perion, Accumulators
• 31 PREC-CAST, Die-cast parts
• 32 RÁBA, Axles, Carriages, military trucks
• 33 Suoftec, AL-wheels
• 34 Schefenacker, internal and external mirrors
• 35 Suzuki, Cars
• 36 Tauril, Rubber parts
• 37 UBP Csepel, Iron casting
• 38 Visteon, Fuel systems, barring engines, coils
• 39 ZF Hungária, Gear boxes, Carriages
• 40 TEMIC, Electrohydraulic break systems
• 41 Schwarzmüller, Body of vans, trailers
• 42 Musashi, Ball-joints, Balancing arms

59
22
33
47
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65
5
30
14
17
48
64
3
29
41
49
60
62
61
6
8
51
52
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66
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10
29
37
40
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11
13
23
43
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20
24
38
39
44
63
18
21
45
26
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10
Most important automotive companies in Hungary
32
5
28
1
12
9
35
16
36
42
7
15
34
57
59
22
33
47
19
65
5
30
14
17
48
64
3
29
41
49
60
62
61
6
8
51
52
53
66
4
10
29
37
40
50
56
25
11
13
23
43
46
55
58
54
2
20
24
38
39
44
63
18
21
45

• 47 Hammerstein, Seats, Seat adjusment parts
• 48 Clarion, Car Hi-Fi
• 49 Eagle Ottawa, Leather coverings
• 50 Euro-Excedy, Clutch parts
• 51 Zollner, Moulding, Metalwork
• 52 Valeo Autoelectric, Car electronic
• 53 Philips APM, Car Hi-Fi
• 54 Autoliv, Seat belts
• 55 Johnson Controls, Antiglare shields
• 56 Isringhausen, Seat covers
• 57 EDAG, Engineering, design
• 58 Magna-Steyr, Engineering, design
• 59 Vogel-Sitze, Coach seats

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29
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Latest investments in the automotive sector

• Audi expansion of the production range
• Opel/Daewoo regional headquarters for CEE
• Suzuki expansion for car assembly
• Ortech new capacity for supplying Opel Suzuki
• SEWS new capacity for the production of spare
  parts
• Toyo new capacity for the production of car
  seats
• Linamar new plant for producing diesel engine
  components
• Phoenix AG development for logistics center
• Porsche new logistics center
• Visteon product development center for
  producing compressors
• Schwarzmüller new capacity for producing
  trailers
• Delphi-Calsonic expansion of compressor
  production
• Renault logistics center
• Bosch expansion of the production capacity
• Saia-Burgess new capacity for producing
  controllers door-locking systems

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Clusters

• Cooperative network of businesses
• Manufacturers, consultants, Institutions for
  training and education, service providers
• Organized on a product basis
• Concentrated on a specific territory
• Utilizes cooperation opportunities
• To improve competitiveness of the participants

13
Role of cooperation through networks

• Goal Creating new business opportunities trough
  synergies
• New market segments
• Improved level of supplier competencies
• Increasing power in the supply chain
• Abilities, Competencies
• Resources
• Market intelligence

14
Driving forces of formulating clusters

• Glocalization - Parallel trends
• Global site selection and Global Sourcing
  Strategies
• Concentration of expertise
• Increasing complexity
• Changing nature of competition
• Typical answers

COMPETITIVENESS, COST REDUCTION
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1st Cluster in the Transition Economies
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Pannon Automotive Cluster
Since December 2000

• Common initiative of
• Audi, Opel, Suzuki, LuK Savaria, Rába, Citibank,
  IKT West-Transdanubian Regional Development
  Agency
• Supported by the Ministry of Economics
• Joined members of the Cluster-Core
• Széchenyi István (Technical) University, Gyor
  (Sept. 2001)
• HVB Bank Hungary (Feb. 2002)
• Siemens Hungary (Sept. 2002)
• Country-wide Industrial Network for the
  Automotive Sector

17
Mission and goals of PANAC

• PANACs mission
• Supporting the localization of production and
  development of modules, and systems
• Improving the Hungarian owned suppliers ability
  to produce and develop high complexity systems
  and parts
• Improving the ability of Hungarian research
  communities to be involved in automotive
  development projects
• Goals of PANAC
• To increase the ability of the supplier companies
  to join the global supplier networks of the
  automotive industry
• To help its partners to increase complexity of
  their products, thus being able to improve their
  position in the supply-chain
• To foster the development of a nation-wide
  automotive strategy
• To be a well accepted reference-provider on the
  partner companies (both to the government and
  domestic or international buyers)
• Internationalization of the network

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PANAC supplier development

• Dissemination of Industry Specific knowledge
• PANAC role starts, where the role of the
  individual customers ends
• Wide impact Reaching high number of potential
  suppliers
• Improving the general level of understanding of
  requirements
• Tools and activities
• Providing access to industry news and information
• Providing trainings, workshops, specialists
  events
• Performing technology transfer services
• Performing individual company assessment
• Leading industry-wide benchmarking activity
• Facilitating inter-company learning

19
PANAC Partners
PANAC Cluster Core (84)
78
PANAC Partner members (51)
PANAC registered Service Providers (12)
Established Dec. 2000
------ PANAC Core-area
20
The PANAC company network
PANAC Statistics Total number of employees
38 000 Total Turnover 5 billion 70 of the
members involved in production 27 of the members
involved in RD
Level of quality readiness is well above industry
average
Healthy balance among the different size
categories
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Partners by activityForming Technologies
22
Partners by activityTurning and Machining
19
Eger
2
Gyor
Debrecen
6
18
3
22
7
Budapest
17
16
9
20
Veszprém
Kecskemét
5
12
11
15
10
Békéscsaba
8
4
21
13
Zalaegerszeg
14
Kaposvár
Szeged
1
23
Partners by activitySurface treatment
Eger
Gyor
Debrecen
Budapest
11
1
14
Veszprém
4
Kecskemét
5
13
15
7
8
Békéscsaba
6
9
12
Zalaegerszeg
10
Kaposvár
Szeged
2
3
24
Partners by activityJoining Technologies
(welding, screwing, bonding, etc.)
Eger
Gyor
Debrecen
5
Budapest
9
13
16
17
Veszprém
Kecskemét
11
15
10
3
7
Békéscsaba
4
12
Zalaegerszeg
18
14
Kaposvár
8
Szeged
1
2
6
25
Partners by activityInjection, blow moulding
8
Eger
Gyor
Debrecen
7
1
Budapest
10
9
Veszprém
Kecskemét
2
Békéscsaba
4
6
Zalaegerszeg
Kaposvár
5
Szeged
3
26
Partners by activityCasting
Eger
Gyor
Debrecen
Budapest
3
4
Veszprém
Kecskemét
1
2
Békéscsaba
Zalaegerszeg
Kaposvár
Szeged
27
Partners by activityElectronic / assembly
technologies
Eger
Gyor
Debrecen
1
Budapest
8
9
Veszprém
7
Kecskemét
2
6
Békéscsaba
4
Zalaegerszeg
Kaposvár
5
Szeged
3
28
Partners by activityEngineering development,
other services
Eger
Gyor
Debrecen
7
17
8
15
1
10
Budapest
2
9
5
11
Veszprém
12
Kecskemét
4
18
3
Békéscsaba
16
14
6
Zalaegerszeg
Kaposvár
13
Szeged
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Invigorating the Hungarian Parts Industry

• International Relations
• Cluster to Cluster Cooperation
• Business Forums, One-on-one business meetings
• International Cluster Cooperation projects
• Single point access
• Requests for quotations filtered and passed on to
  qualified suppliers
• Co-operating partner of ITD-H, the Hungarian
  Trade-development organization
• Company representation at Hungary
• Technical assistance
• Project management services
• Identifying synergies Initiating cooperation,
  projects
• Involvement in EU co-operation projects
• Supporting Hungarian companies in joining
  international cooperation projects
• Improving the Automotive focus of partners in
  service, education and government

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Thank You for Your Attention!

• PANAC Coordination Office
• H-9027 Gyor, Hédervári u. 25
• Hungary
• Tel/Fax [phone]
• E-mail rozsa.zoltan_at_panac.hu
• www.panac.hu (Hungarian only)