BMI's Executive Summary

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A poor performance in terms of new car sales this year has in no way diminished Hungary's appeal as a destination for investment in automotive production. Industry majors such as Audi continue to rely on the country as a significant base for manufacturing, while Hungary's vehicle parts sector is set to flourish even further on the back of fresh investment.

According to estimates from the European Automobile Manufacturers Association, ACEA, during the period January-October 2007 new car registrations in Hungary totalled 145,139 units, a significant fall of 7.5% against the same period a year earlier. The result meant that Hungary was the only new member state of the European Union to report a downturn in sales for the 10-month period. Indeed, new car sales in the country have dwindled this year as a result of the government's fiscal policies, with direct and indirect tax rises affecting net wages and curbing consumer spending. BMI expects sales to fall in 2007 and 2008 before recovering in 2009 with an upturn in the economic cycle, with GDP growth forecast to recover from around 3% in 2007-08 to over 4% in 2009. Our 2007 sales estimate for passenger cars currently stands at 196,250 units.

With respect to manufacturing, Audi Hungária began producing its A3 Cabriolet vehicle at its facility in Györ in H207 in line with plans announced earlier that year. Audi has invested some EUR5mn in order to house production of the A3 in Hungary, in line with its German headquarters' plans to build 1.5mn vehicles by 2015. Audi now makes the TT Coupé, TT Roadster and A3 Cabriolet at the Györ plant, which, according to industry sources, has a daily capacity of 300 units.

In terms of Hungary's car parts industry, two players, F Segura of Spain and Femat GmbH of Austria both unveiled investment plans for the sector in H207. F Segura has earmarked EUR20mn in order to build a manufacturing plant in Szolnok, central Hungary, while Femat is preparing to inject more capital into its Hungarian affiliate, Femat Hungária Kft. Both projects, in addition to Audi's participation in the market, reflect the increasing number of carmakers setting up manufacturing plants in Central and Eastern Europe, which in turn is fuelling growth in the vehicle component sector.

Contents

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Chapter 1 – SWOT Analysis

Hungary Auto Industry SWOT

Hungary Economic SWOT

Hungary Business Environment SWOT

Chapter 2 – Europe Regional Market Overview

Production

Table: European Autos Production – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: European Autos Production By Group, H1 2006

Table: Central and Eastern European Car Assembly Plants, 2006 (Countries under review)

Table: The Rise in Central and Eastern European Production and Average Wages

Sales

Table: Europe Autos Sales – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: EU and EFTA Autos Sales by Group, H1 2006

Table: New Vehicle Registrations by Market in Europe (EU and EFTA), 2006

Table: New Car Registrations by Market in Europe (EU and EFTA), 2005

Competitive Landscape

Table: EU-15 and EFTA, Car Registrations, 2005

Table: Top 10 Best Selling Models in Europe, Jan-May 2006

Suppliers

Table: Top Five OEM Parts Suppliers, 2005

Regulation

European Car Prices

Table: Price Of Europe’s Five Top-Selling Models By Market (EUR)

Chapter 3 – Business Environment Rankings

Table: Central and Eastern Europe Business Environment Ranking

Economics – Long-term Risk

Politics – Long-term Risk

CBU Output Growth

Vehicle Ownership/Penetration Potential

Regulation

Competitive Environment

Chapter 4 – Industry Forecast Scenario

Production and Sales

Table: Hungary Historical Data & Forecasts (CBUs unless otherwise specified)

Trade

Table: Hungary Historical Data & Forecasts (CBUs unless otherwise specified)

Economic Contribution

Table: Hungary Historical Data & Forecasts (CBUs unless otherwise specified)

Chapter 5 – Macroeconomic Forecast Scenario

Table: Nominal And Real GDP

Country Snapshot: Hungary Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 6 – Special Focus: Commercial Vehicles

Regional Market Overview

Table: Regional Commercial Vehicle Market: Country Ranking, Sales

Table: Regional Commercial Vehicle Market: Country ranking

Table: Regional Commercial Vehicle Market: Country Ranking, Production

Table: Regional Commercial Vehicle Market: Company Ranking Of Significant Regional Manufacturers

Table: Recent And Planned Investments In Central And Eastern Europe

Hungary Market Overview

Sales

Table: Size of Light Commercial Vehicle Market

Production

Table: Production in Hungary

Table: Production Forecasts for Hungary

Chapter 7 – Competitive Landscape

Suppliers

Chapter 8 – Company Monitor

Regional Case Study: Kia

Sales

Table: Kia Sales in Europe (EU and EFTA), By Model

Production

Table: Kia Production In Europe (EU, EFTA, Romania and Turkey), By Model

Company Profiles

Magyar Suzuki

Opel (General Motors)

Audi Hungaria Motor (Volkswagen)

Ford

Suppliers

Rába Jármuipari Holding (Rába Plc)

Denso

Delphi Automotive

BMI Forecast Modelling

Automobile Industry

Sources

Appendix: Regional Demographic Data

Wages (ave. labour force per annum), US$ PPP

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for European Automotives: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Automotive Sources

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BMI's European Automotives Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: