Hungary will recoup investment grants for expansions at the local plants of German carmakers Audi and Opel many times over, National Development Minister György Matolcsy said on Wednesday.
The government decisions on the grants were taken after a long but successful series of negotiations, Matolcsy said.
Audi will get a HUF 11.2 billion investment grant to support the expansion of its base in Gyor (NW Hungary).
Audi announced in September a €900 million expansion at the base. The expansion is to raise output at the plant to 125,000 cars a year from 2013 and create 1,800 jobs.
The investment grant works out to HUF 6 million per worker, Matolcsy said. The state will recoup the grant within three years, he added.
Opel will get a HUF 5.5 billion investment grant for its expansion.
Opel announced in September it plans to spend €500 million to introduce a third line of engines at its production base in Szentgotthárd (W Hungary). The project will create 800 jobs from 2012.
The investment grant works out to HUF 6.8 million per worker, Matolcsy said. The state will recoup the grant within five years, he added.
The two investments will operate for at least 12-15 years, bringing Hungary a step forward in the automotive industry competition in the region and helping it “catch up” to Poland’s level of production, he said.
The expansions at the bases of Audi and Opel, together with a plant German peer Daimler is building in Kecskemet (C Hungary), will boost Hungary’s GDP by two percentage points, Matolcsy said. When production starts at the new capacity, the automotive industry could account for 16-18% of Hungary’s total exports, he added.
The €800 million plant Daimler is building is set to start serial production in Q1 2012. It will make next-generation compact models. Daimler was awarded the equivalent of €111.5 million in state aid, in the form of an investment grant and a corporate tax allowance. The investment is to create 2,500 jobs.
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