Automotive FDI in Hungary on the increase

Foreign direct investment in the Hungarian automotive sector, including components and original equipment manufacturers (OEM), has experienced a year-on-year increase since 2013. Greenfield investment monitor www.fdimarkets.com had recorded 19 projects by October 2016, just one project short of the total recorded for 2015 and almost double the 10 recorded projects tracked in 2013.

Across the entire period, automotive components has surged ahead, with a total of 60 recorded investments compared with four OEM projects, although OEM has seen two new projects in the 10 months of 2016 alone. Both capital expenditure and job creation have seen a year-on-year increase as well, particularly in 2016.

According to www.fdimarkets.com total investment has increased from $446.3m in 2013, $605.9m in 2014, and $655.4m in 2015 to $2.4bn already recorded in 2016. Similarly, Hungary saw 9348 jobs announced in the 10 recorded months of 2016, following smaller figures of 1445 jobs in 2013, 3014 jobs in 2014 and 3878 jobs in 2015. 

Germany leads

The top investment source country in terms of project numbers was Germany with 30 investments and a 46.88% market share. Next was the US with 11 projects and a 17.19% market share, then Japan as third strongest investor with seven recorded projects and a market share of 10.94%.

Throughout the recorded period up to October 2016, the automotive sector in Hungary saw the most consistent investment from Germany, with nine projects in 2014, as well as 2015, and 2016. 

The project, capex and job creation figures of 2016 suggested this upward trend is likely to continue. Given Hungary’s favourable position in emerging Europe and as a member of the EU, the country could enjoy a further influx in automotive FDI post-Brexit.

Fellow emerging European countries Poland, Romania, Slovakia and Slovenia, all of which have EU membership, saw a similar increase in FDI in the automotive sector during 2016.