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Audi to invest €900m at Hungarian plant

German car maker Audi will invest €900 million to expand capacity at its base in the Hungarian city of Győr by 2013, Audi Chairman of the Board of Management Rupert Stadler and Hungarian Prime Minister Viktor Orbán said on Thursday.

The investment will create 1,800 jobs, Orbán said. It could add 2% to Hungary's GDP when completed, he added.

Audi's base in Győr will be the source of at a total of 15,000 jobs, both at the plant and at suppliers, when the capacity expansion is completed, Stadler said.

The expansion will raise the annual number of cars produced at the base in Győr to more than 125,000.

The size of the state subsidy for the investment was not revealed at the press conference, but Orbán said the National Economy Ministry's proposal would most certainly be approved by the government. The government takes into account both the creation of workplaces as well as recouping its investment when deciding on one-off subsidies, he added.

Audi wants to raise its annual car sales by 50% to 1.5 million by 2015, which will require more capacity, Stadler said. There was much competition to take on the new capacity within the Volkswagen group, but Győr won out because of its infrastructure, its flexible and competent workforce and the favorable wage structure in Hungary, he added. Hungary was chosen even though the wage structure in China is 30% more favorable, he noted.

In the future, the plant in Győr will carry out the entire production process, from the manufacture of the car body to the assembly. Among the types of cars the plant makes will be the next generation A3. The plant already makes the Audi TT Coupe, Roadster and A3 Cabriolet models.

On top of the €900 million investment, Audi has spent €23 million to buy a 200-hectare plot on which to build the capacity. Asked whether the fact that the plot is in a nature preserve would be an obstacle for the investment, Orbán said all the conditions (for the investment) have been set and the problem would be “solved appropriately according to international standards”. “This is why there is no plan B,” Stadler added.

Audi Hungaria said earlier it had revenue of HUF 681 billion in the first half, up from HUF 490 billion in the same period in 2009. Engine output of the plant in Győr jumped 32% to 876,932. The number of vehicles assembled at the plant increased 25% to 21,493 vehicles and included 9,625 Audi TT Coupe models, 3,330 TT Roadsters and 8,538 Audi A3 Cabriolets.

Audi has invested €3.89 billion at the base in Győr since establishing its unit in Hungary in 1993. The plant started assembly work in 1998 with a staff of 200. Today the plant employs 5,700 people. (MTI-Econews)