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Hungarian ingenuity drives car business

R&D and innovation support are helping turn Hungary into the scene for some exciting new developments in automotive technology.

Innovation is booming in Hungary, helping to drive the country’s automotive industry. At the same time, that sector’s ability to invest heavily in R&D supports innovation here. The result is a host of new ideas in the automobile world coming out of Hungary – as well as a tendency for evermore companies to locate their research facilities here.

One recent example of Hungarian ingenuity put to work in a car is Suzuki’s Vitara model which has been developed in Hungary from the proto production phase and will be produced here for export world-wide.

Viktória Ruska of Suzuki Communications notes that this is the result of the local plant maturing over its 24 years of operation. “We grew up to this task to be able to launch a new product,” she says. The development of this model involved not only Japanese technology but also Hungarian engineers and a local work force that made contributions to design. According to company information, a lot of important innovation took place locally with Hungarian teams heavily involved, making suggestions to the parent company.

The Vitara model is distinguished by its ability to be personalized, with many options to add or remove features. While the most important markets for its production continue to be the traditional European targets (Germany, Great Britain, France, Italy and Russia), Suzuki has started to expand its export and distribution partners over recent years to include Latin America, Asia and New Zealand.  “During the crisis years we had to expand and not only focus on Europe but other markets as well,” comments Ruska. Suzuki currently makes its X-Cross model available in Mexico and the Vitara is expected to follow.

In anticipation of these two latest models, the company began reconstruction at its plant in Hungary one-and-a-half years ago in order to readjust production, technology and lay out. There have been several phases to the reconstruction, some of them on-going. The new models are fully robotized with no manual welding; there are more than 700 robots in operation at the plant.

Approximately €400 million have been invested by Suzuki in the launch of these models, including technology, reconstruction and innovation expenses. The X-Cross production also added 100 people to the labor force for a total of 3,100 employees; the company reports it is in heavy production at the moment.

Suzuki’s Vitara, in addition to product launches by Daimler and Audi, is expected to push light vehicle assembly volume in Hungary. PwC’s “Autofacts” expects total assembly volume to grow by 5.7%, exceeding 461,000 units in 2015.

PhDs design steering systems

Automotive production is not the only realm benefitting from local innovation in Hungary. ThyssenKrupp, a leading global Tier 1 supplier, not only sources the hardware and software for its electronic steering system directly from Hungary to production plants around the world; the system itself was developed here. “We are very proud of this accomplishment in innovation here,” says Marc Eckstein (pictured), general manager of ThyssenKrupp Presta Hungary. The innovation behind its electronic steering system began with three Hungarian PhD students working on it 16 years ago. From there, the company saw potential in Hungary and began to build up its development center here.

Compared to a hydraulic system, which relies on a constant supply of energy, the electronic steering system uses fuel only when in use, saving on average three deciliters per 100 kilometers. ThyssenKrupp’s clients for this system include Daimler and BMW, among others. The Mercedes C Class already has the electronic steering system in use.

“We develop the electronic control here in Budapest, the brain of the unit,”

says Eckstein. The systems are produced all over the world using the technology developed locally in Hungary.

“This development center is unique to Budapest within ThyssenKrupp,”

adds László Naszádos (pictured), department leader at ThyssenKrupp Presta Hungary. The center employees 370 engineers, many with Masters and PhD degrees, and the company is considering expansion.

Both Eckstein and Naszádos recognize that the driverless car is the future in automotive innovation. ThyssenKrupp has an advanced development team working on the interface between cameras and sensors that capture external data, and the steering systems that need to react to this data input.

Bosch Hungary’s 1,200 engineers

Another key player in the auto parts sector is Bosch, a company also recognized for its work on the driverless car. Thomas Beyer, regional director of automotive aftermarket at Bosch Hungary, notes that development of many driverless aspects is already underway in the automotive industry. Automated parking systems are already in use and the company plans to have an operational highway pilot system up and running in the next five years. This will allow for nearly automated driving on the highway, with drivers in a monitoring role. Beyer believes that this will eliminate some driver error and boost safety.  Bosch’s acquisition of ZF Lenksysteme earlier this year also points towards a focus on automated driving technologies. The company is specialized in steering systems for highly automated cars.

Bosch is an important employer in the country, boasting 8,900 associates, 1,200 of whom were engineers, by 2013. Bosch focuses on connectivity, linking innovation and knowledge from a variety of sectors in which it participates to advance in its automotive branch called Mobility Solutions. According to Beyer, the name of the division reflects a change in mindset: “It is not only about the car; we have to consider new products outside and beyond the car.” Beyer says Hungary has a good level of technological education and skill as well as creativity to be able to develop these solutions. As proof of this, Hungary is home to some of the company’s largest production facilities outside Germany.

Bosch prides itself on serving the automotive industry from a car’s production (by supplying OEMs) to its servicing and all the way through to its life cycle end.  In Hungary this involves servicing 70 – 80,000 parts in 3.5 million used vehicles. The average age of a car in Hungary is 13 years, according to Beyer, which means the replenishment rate is low. Per household penetration is also low. In Germany, for example, families will have second and even third cars; in Hungary, many are restricted to just one car per household. “The potential in Hungary is great. And as these old cars are replaced with new cars, it will result in a major ecological impact as well as the many safety benefits you get with new cars. It is just a question of how and when purchasing power is spent in this direction. It will come, I just can’t say when.”