ZF Hungária, the local subsidiary of German car parts maker ZF Friedrichshafen AG, has announced plans to invest HUF 31 billion at its plant in Eger, northern Hungary, according to a press statement issued by the Ministry of Foreign Affairs and Trade. The Hungarian government will support the investment with a HUF 6.7 bln grant.
Minister of Foreign Affairs and Trade Péter Szijjártó said that at least 770 new jobs will be created through the investment, which will bring new cutting-edge technology to the country. Currently the company employs a workforce of 900-1,000.
Through the investment, the company will add the production of eight-speed automatic transmissions for passenger cars to its portfolio. Transmissions made in Eger, once the investment is completed, will also be produced for export, which is seen boosting Hungarian export volume by HUF 200 bln annually, the foreign minister said.
The company is planning to raise the ratio of Hungarian suppliers from the current 2% to 15% in the near future, Szijjártó noted.
Szijjártó recalled that 2016 saw record production in the Hungarian automotive industry, valued at HUF 7,874 billion.
Speaking of the general industry environment, the minister was cited by state news agency MTI as saying that the world economy has reached a turning point where the competitiveness and economic success of individual countries depends on whether or not companies at the forefront of digitalization, R&D and cutting-edge technologies choose them as sites for investment. Countries that are able to convince firms using advanced technologies to invest will be stronger in future, while those who do not will lose out.
Szijjártó continued by saying that until now, Hungary has been an ideal site for production, but that now its task is to become an ideal country for research and development. To promote this, he said that the government has taken the necessary measures and decisions, introducing the lowest corporate tax rate in Europe, linking tax breaks to R&D, and strengthening vocational training.
The minister noted that the automotive industry is essentially the driver of the Hungarian economyʼs growth, and if there is any sector where both production and competitiveness criteria are undergoing a complete transformation, then it is in auto manufacturing. He noted that the strength of the Hungarian industry is apparent in the presence of 15 of the worldʼs 20 biggest primary suppliers, adding that this includes ZF, which employs 140,000 people worldwide, including 13,000 in R&D.