A test track takes Hungary deeper into r&d
Hungarian officials believe the country's new $15 million Zalaegerszeg test track will become a magnet for future auto investment. Prime Minister Viktor Orbán has gone so far to say the track will be the genesis of "the Hungarian automotive industry's Silicon Valley," putting the country firmly on the world map of vehicle research, development and testing.
In under 30 years, Hungary has transitioned from Communist satellite state to the European Union's fifth fastest growing economy, with a 25 billion-euro-a-year automotive sector accounting for 30 percent of all manufacturing output and a fifth of all exports.
Last year the Hungarian Investment Promotion Agency approved support for 36 new automotive investments, expected to create 6,700 additional jobs on top of the nearly 160,000 already employed in the sector. Audi, Mercedes-Benz, Opel and Suzuki have auto or engine plants in the country. Mercedes is now investing 580 million euros ($680 million) in upgrading and expanding capacity there, and a further $1.17 billion to build a second plant. There are also more than 700 suppliers in Hungary.
Recent projects include new electric-vehicle battery plants by Japan-based GS Yuasa and South Korea's SK Innovation and Shinheung Sec. Japan-based Zoltek is constructing what likely will be the world's largest carbon fiber plant. Autoneum and Rehau both are building new plants, as is the alloy wheel-making venture Arconic-Köfém.
But Hungary is especially keen to encourage more r&d, officials say. The country has cut its corporation tax rate to 9 percent - the lowest in the EU - and introduced special tax incentives and other benefits for companies involved in r&d. Continental has just opened a new Deep Machine Learning Competence Center.
The Zalaegerszeg test track is expected to help. Designed for both conventional and autonomous cars, it features an urban section where it will be possible to test up to 70 vehicles at the same time. Meanwhile, Bosch Hungary has received government backing to build a separate 10,000 square-meter test track where it will focus on automated driving and electric mobility.
This story appears in the 2018 Guide to Economic Development in the Global Auto Industry. To view the entire supplement please click here.