ALL FLAGS IN THE GUEST … TO THEM?
Hungarian automotive industry today.
Elena WARSAWSKAYA, Igor MORGARETTO
Tell someone a dozen years ago that the last peep of world automobile fashion is being released in Hungary, they would only laugh. Like the famous "Russia - the birthplace of elephants." "The most cheerful hut of the socialist camp" was a country of green peas, goulash and chardash, well, let it be "Ikarus" (after all, 14 thousand a year is a serious amount), but prestigious cars …
And now - the year 2000: 50 thousand Audi TT, 80 thousand Suzuki, about 500 thousand Opel engines, a million Audi engines - this is not a complete list of what is released annually in Hungary this year. Such success and in just ten years! Not in one change of order, there are probably other secrets.
THIS IS A SWEET WORD “BENEFITS”
The recipe is famous and simple: tax exemption. At one time, Hungary passed a law to support large investors. He invested more than 10 million forints (now it is $ 40 million) - do not pay tax for 10 years if you place half of the components within five years of production. Almost like ours! Only the amount of investment that meets the conditions of the game is much less.
In fact, everything is much deeper. For example, even smaller investors have a chance to receive tax benefits: investing more than 3 billion forints (now $ 1.2 million) if they place production in underdeveloped areas of the country; invested from 200 million forints ($ 80 thousand) if they develop local infrastructure. It is important that the law applies not only to car assembly projects, but also to any other, not only foreign, but also domestic investors.
The first to be interested were the Japanese. Behind them are Opel, Audi and Ford.
Attracted foreigners not only benefits. Hungary is a calm country, there is no political upheaval and is not expected. The communists, whom the bourgeois are so afraid of revivals, here in the last election took … 1.5% of the vote! Engineers - to match the European ones, skilled workers, to the West - a stone's throw, roads, communications - at a level. Well, just greenhouse conditions!
And it was not the traditional Hungarian tomato cucumbers that grew up in them, but the automobile industry. Over the years, the total investment in the industry amounted to almost $ 2 billion - 10% of all investments in the country's economy. The annual turnover is about 3.8 billion dollars. About 30 thousand new jobs have been created. By the way, the average salary of those employed in the automotive industry is higher than in the country (but just do not compare with Western European!).
RUNNING PLACE INSTEAD OF SOVIET TANKS
A Madyar Suzuki worker cannot afford to buy a car from his own factory. The price of the cheapest Swift is $ 7, 000, and the average employee’s salary is about $ 150 a month. Like on our AvtoVAZ! Here people do not stand on the conveyor for more than two years, leave. But in the old Esztergom, where the plant is located, and its environs - unemployment, the plant has no problems with personnel.
In the welding shop - not a single machine. UzDaewooAuto, for example, is equipped better, more modern. And here, in the center of Europe … Well, manual labor is more profitable - cheaper. Capitalists are used to counting money. It’s easier to supply a hundred Hungarian workers with welding machines than to purchase an automatic line.
In 1990, an assembly plant began to be built on the site of the Soviet military training ground. Investments - 200 million dollars. Power - 70 thousand cars designed for the domestic market. By 1994, the cars produced here were already half composed of Hungarian components. Began export to the UK, Holland, Germany. The Japanese believed: in the former socialist country one can achieve normal production, good quality. In 1997, they decided to expand production to 100 thousand cars a year. They invested another 150 million dollars and since 1999, in addition to the restyled Swift, they have started to produce the latest Suzuki-Wagon Air Plus, which this year will make 35 thousand. And the enterprise itself from a joint has turned into almost purely Japanese: 98% of the capital belongs to partners from the Land of the Rising Sun.
“Well, what's so terrible?” - the director general of the industry department of the Ministry of Economics, Sandor Molnar, is surprised at our question. - The arrival of foreign companies gave a powerful impetus to small and medium-sized enterprises for the production of components. Forty-two companies, for example, today produce batteries, clutch mechanisms, seats, shock absorbers, dashboards, and much more for Swift. Eleven of them are already exporting their products directly to Japan, to the Suzuki Motors factories.
AUDI FREE ZONE
Here is a piece of Germany in every sense. Foreign factory, where the owners and management are Germans. Without permission from Ingolstadt, guests are forbidden not only to take pictures in the workshops, but even to sit on manufactured cars, touch, look inside. They enter the territory of the enterprise as if it were a secret facility: filling in some papers, checking their passports, bags, driving out a metal detector … In light workshops over the body of the future Audi TT, light as an operating room of a hospital, people … no, not in white coats, but in no less sterile overalls. Components arrive at the plant in sealed containers, and from here the finished cars go straight to the Vaterland. There is no contact with Hungary proper, except perhaps the touch of the hands of local workers. Although … every year, Audi buys components from local manufacturers for $ 45 million, and this year for as much as 120 million! Moreover, the country of origin is not indicated on the machine itself - not every buyer knows that TT is produced in Hungary and only in Hungary.
But the dandy car is not the main production of the Audi plant in Gyor. Since 1994, in this industrial city (by the way, the Raba truck factory eking out a miserable existence is also located here), engines have been assembled. The German concern has invested 450 million dollars in this production, and now a million gasoline engines annually leave the enterprise’s conveyors. In 2000, the refinery will be the first in the country in terms of revenue, overtaking the largest oil company in Hungary - $ 3 billion!
The leadership of the Hungarian branch of Audi plans to build another motor assembly shop. There will be investments - the benefits will last. By the way, the German company still does not pay taxes in Hungary …
WHO IS NEXT?
Yes, actually, none of investors pays taxes. Someone's time has not come yet, someone chose to invest money again. Here, for example, Opel. The main production profile, in which $ 225 million was invested, was the production of 16-valve engines of 1.4 and 1.6 liters. They are delivered to all corners of the world where they make "corsa", "asters" and "vectra". Now the output of engines has brought up to half a million. An additional $ 130 million has been announced in the construction of a gearbox workshop. It is said about the need to increase the share of Hungarian parts in boxes to 50%.
In the early 90's came to Hungary and Ford. At first, it produced non-contact ignition systems, and now at the enterprise in the former residence of the kings - the city of Szekesfehervar, it also makes gas pumps and starters. All this goes to eight Ford plants in five countries. In the future, naturally, expansion of production.
Well, who has not yet managed to open a business in Hungary? BMW? Here's a rumor for you: they say that the German concern intends to assemble some new model of its own here. Not that "three rubles", not that … "kopeck piece".
It seems that foreign car makers are racing to invest in Hungary. However, the truth is, you need to hurry. By 2003, the former socialist country will become an equal member of the European Community. And then - tax breaks cried. Hungary will no longer be able to create special conditions for investors. And only cheap labor will remain as the bait of Western investment. Which, however, is also a lot.
PRIDE INSTEAD OF … OIL?
Choking with delight, rush to “learn from experience”? Going from anger to stigmatize capitalist expansion? Let's start by calmly weighing the pros and cons of the Hungarian approach to the automotive industry.
Asset - employment growth. Seven and a half million dollars a month! Such a salary is received in aggregate by industry workers. This money flows into the country's economy, stimulating its development. Good!
The image of Hungary is changing: from the "country of green peas" - to the country where Audi-TTs are produced. Is there a better recommendation for investors from various industries?
Still - the infrastructure of backward areas is developing.