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Why to

in Hungary?

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Outline

Interesting Facts

Economic Indicators

Foreign Investment Advantages

Disadvantages

Conclusion

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Interesting facts of AutomotiveIndustry

Total number of companies: ~ 350

Suzuki and Opel began producing automobiles in Hungary in

1992 (the first produced there since before World War II!!)

Today, 17% of total Hungarian exports come from Audi , Opel

and Suzuki

Automotive sector employs 90,000 people in more than 350

car component manufacturing companies

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Conti.

Contributes 20 per cent of total exports.

Over 630 companies employing a total of 100,000 peopleare active in the sector.

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Economic Indicators

Source- Euromonitor

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Tradition of innovation

Access to a talented, creative, flexible and qualified labor pool

at competitive costs

Central location - a possible hub for Europe

Excellent local supplier network

The presence of major automotive suppliers in Hungary

Tax incentives & financial subsidies

Key Points To Invest In The HungarianAutomotive Sector

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The Hungarian Act on Foreign Investment

It specifies that investments by non-residents enjoy full legal protectionand security.

Bilateral Treaties in force guarantee additional protection to foreigninvestment.

Foundation of Companies

Foreign individuals or entities can establish new companies or mayacquire shares in existing companies in Hungary.

Returns Payable to Foreign Investors

No legal restrictions on payment of return on investments to foreignshareholders.

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Major Attractions

Industrial parksInvestors can choose from 160 operating industrial parks to

set up business on the basis of their business, cultural or

professional demand.

Up to the present, 4.1 billion USD capital has made its wayto these parks.

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Labor

Labor makes up 10% to 15% of car makers costs.

Wages/hour in Germany cost upto 40 Euros where as in Slovakiaand other central eastern europe it costs only around 7.5 Eurosapprox.

Infrastructure

Hungary is a potential logistics and production base thanks to its favorable

geographical position in Europe

Direct access to the Balkans and Eastern Europe

Four Helsinki-corridors running through the country.

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Automotive Cluster in Central Europe

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On the Contrary

Why not to invest in

Hungary?

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High Inflation and Government Debt Lead to

Higher Taxes

At more than 7% it is being prevented to join Euro forwhich it needs to bring to 3%.

Rising CostsGDP per capita was nearly $16,000 which is nearly

half that of the average Western European country

but 32% higher than other eastern Europeancountries such as Romania and Bulgaria.

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Low and slowing growth

Slowed growth could be indicative of the higher costsand the slowing of entrance by foreign companies,

but it would ultimately translate in the long run into

lower profit expansion.

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Conclusion

Objective

Trends

Outcome

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References

HITA

Euro monitor

Wikinvest KPMG

Erva Sirs Presentation

http://www.hita.hu/Content.aspx?ContentID=f2994e2d-f393-4908-b3db-1355ef864e6fhttp://www.euromonitor.com/hungary/country-factfilehttp://www.wikinvest.com/wiki/Investing_in_Hungaryhttp://www.kpmg.com/HU/en/IssuesAndInsights/ArticlesPublications/Documents/Investment-in-Hungary-2012-04.pdfhttp://www.kpmg.com/HU/en/IssuesAndInsights/ArticlesPublications/Documents/Investment-in-Hungary-2012-04.pdfhttp://www.wikinvest.com/wiki/Investing_in_Hungaryhttp://www.euromonitor.com/hungary/country-factfilehttp://www.hita.hu/Content.aspx?ContentID=f2994e2d-f393-4908-b3db-1355ef864e6f

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