Mercedes-Benz announced a 185 billion forint (EUR 590M) investment project in Kecskemét on Friday; Mercedes-Benz Manufacturing Hungary Limited is expanding its activities with the production of next generation compact cars.
The investment will mean the construction of a new bodywork plant by 2018 and the addition of efficient and innovative equipment to the company’s Hungarian facilities.
Owner Daimler AG will be spending 80 billion forints (EUR 256M) on the new, 99 thousand square metre bodywork plant, which will be fitted with state-of-the-art technology. The full project also includes the development and expansion of the company’s existing capacities.
“The Best or Nothing”, states Mercedes’ slogan, and the company voted in favour of the best when it chose Hungary and Kecskemét”, Minister of Foreign Affairs and Trade Péter Szijjártó said on Friday at the foundation stone laying ceremony for Mercedes-Benz Manufacturing Hungary Limited’s 590 million euro project to enable the manufacturing of next generation compact vehicles.
The project is proof of the fact that it was worthwhile for the Government to embark on an economic policy aimed at making Hungary the European centre of high added value activities, Mr. Szijjártó declared.
Mercedes-Benz Cars international director of compact cars production Michael Göbel characterised the eight-year history of the company’s plant in Kecskemét as a “high-impact development”.
The factory in Kecskemét that boasts a “unique success story” will continue to be the “main pillar” for the manufacturing of compact Mercedes models, even while taking into account the fact that in addition to Rastatt in Germany, Kecskemét and Peking, Mercedes is now also manufacturing compact cars in Mexico, he said.
According to Mr. Szijjártó, the foundation stone is also a milestone; with the new investment programme, cooperation between Mercedes and Hungary is moving forward into a totally new dimension. The new project means the total value of the German company’s investments in Hungary will exceed 500 billion forints (EUR 1.6bn), he emphasised.
Mr. Szijjártó also pointed out that this is the largest investment in Hungary to be announced within the past 18 months; the last project with a similar order of magnitude was the investment by Indian company Apollo Tyres in September 2014.
“Hungary and every Hungarian can be rightfully proud of the fact that one of the world’s largest and most innovative automotive industry companies has manufactured more than half a million cars in Kecskemét during the past 4 years”, said the Minister, according to whom it was worthwhile for the Government to embark on an economic policy aimed at making Hungary the European centre of high added value activities”.
Hungary is one of the bastions of the continent’s automobile manufacturing industry and this investment further reinforces that position”, he added.
2015 was a record year for the sector with a production value of 7833 billion forints, a 17.6 percent increase compared to 2014, the Foreign Minister reminded those present. We seem to be maintaining that momentum with figures for the first two months of the year indicating further growth of 3 percent, he said. The European and global competitiveness of the sector is clearly indicated by the fact that 92.8 percent of the manufactured production value is exported, he noted.
Mr. Szijjártó also highlighted the fact that there is “cutthroat competition” for similar investments. A good tax system, a highly developed infrastructure and a secure energy supply now represent the most basic services, in addition to which the availability of a highly trained workforce in suitable numbers is also essential, he explained.
Mr. Göbel praised the commitment, passion and precision of the Hungarian professionals employed at the company’s Kecskemét plant, as well as the constructive cooperation Mercedes-Benze had established with Hungary and the Hungarian Government.
In her speech, Fidesz Mayor of Kecskemét Klaudia Pataki Szemereyné declared: “The new investment is a message that Mercedes, which in addition to its 4000 direct employees also provides a living for a further 10 thousand people, is also proud of Kecskemét and is not only one of the city’s largest employers but is also a partner, ally and friend to the city”.
Chairman of the Board of Mercedes-Benz Manufacturing Hungary Limited Christian Wolff spoke about the important role the Kecskemét plant will play in the manufacturing of the next generation of compact cars, where the working environment will become more comfortable and people-orientated, thus increasing the plant’s flexibility and efficiency.
The factory in Kecskemét manufactured more than 180,000 compact cars in 2015. The first Mercedes vehicle produced in Hungary was the B-Class, while production of the four-door CLA coupé and CLA Shooting Brake was launched at the Kecskemét plant in 2013 and in January 2015, respectively. The latter two models are produced exclusively in Hungary for export to the whole world, more than 180 countries.
According to public company data, Mercedes-Benz Manufacturing Hungary Limited realised an annual turnover of some 2.8 billion euros in 2014 compared to 2 billion euros in the previous year, almost all of which was derived from exports. The company’s manufacturing profits exceeded 63.8 million euros in 2014, somewhat less than in the previous year; following the distribution of approved dividends and participation, the company’s annual net profits were 0 euros.
Last year, the Daimler Group sold 2.9 million Mercedes vehicles, 12 percent more that in the previous year; profits increased by 15 percent to 149.5 billion euros and net profits jumped by 22 percent from 7.3 billion in 2014 to 8.9 billion euros in 2015, a report published in February by Daimler AG states.
Sales of Mercedes-Benz automobiles increased by 16 percent.
The report forecasts further growth for this year, although to a lesser degree than in 2015. The company is expecting major increases in sales in both Asia and Western Europe.
(Cabinet Office of the Prime Minister/MTI)
