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Market of and automotive components and parts in Hungary (2012)

1. Domestic Demand in Hungary

 Domestic consumption of cars, target consumers, consumers behaviour

In 2011 there were 2 967 808 million passenger cars registered in Hungary, 16 255 less than previous year. Since 2008 the number of registered passenger cars decreased by 87619 units.

Stock of passenger cars by make Make 2008 2009 2010 2011 Pieces % Pieces % Pieces % Pieces % Alfa Romeo 12 542 0,4% 12 053 0,4% 11 858 0,4% 11 846 0,4% 52 918 1,7% 53 092 1,8% 53 586 1,8% 54 912 1,9% BMW 43 953 1,4% 45 718 1,5% 47 093 1,6% 49 970 1,7% 33 989 1,1% 35 436 1,2% 36 043 1,2% 36 709 1,2% Chrysler 4 814 0,2% 4 851 0,2% 4 868 0,2% 4 893 0,2% Citroën 81 157 2,7% 80 645 2,7% 80 483 2,7% 80 755 2,7% Dacia 12 945 0,4% 12 297 0,4% 11 982 0,4% 12 647 0,4% Daewoo 71 947 2,4% 71 422 2,4% 70 872 2,4% 69 684 2,3% Daihatsu 6 024 0,2% 5 586 0,2% 5 215 0,2% 4 939 0,2% Datsun, Nissan 2 947 0,1% 2 451 0,1% 2 155 0,1% 1 897 0,1% 137 170 4,5% 134 623 4,5% 132 452 4,4% 130 109 4,4% Ford 225 566 7,4% 226 419 7,5% 226 797 7,6% 227 515 7,7% Honda 46 245 1,5% 47 619 1,6% 48 349 1,6% 49 098 1,7% Hyundai 17 373 0,6% 17 956 0,6% 18 685 0,6% 19 521 0,7% KIA 14 692 0,5% 16 000 0,5% 16 895 0,6% 18 074 0,6% Lada 149 527 4,9% 131 151 4,4% 117 299 3,9% 104 533 3,5% Lancia 5 365 0,2% 5 115 0,2% 4 945 0,2% 4 807 0,2% Maruti 10 667 0,3% 10 193 0,3% 9 734 0,3% 9 120 0,3% Mazda 36 632 1,2% 36 116 1,2% 35 829 1,2% 35 600 1,2% Mercedes 53 035 1,7% 53 364 1,8% 54 218 1,8% 55 981 1,9% Mitsubishi 27 642 0,9% 26 926 0,9% 26 267 0,9% 25 581 0,9% Moszkvics 1 704 0,1% 1 460 0,0% 1 313 0,0% 1 164 0,0% Nissan 48 481 1,6% 49 247 1,6% 49 720 1,7% 50 295 1,7% 434 055 14,2% 431 325 14,3% 429 636 14,4% 428 671 14,4% 121 024 4,0% 120 779 4,0% 120 401 4,0% 120 576 4,1% Polski Fiat 23 698 0,8% 19 568 0,6% 16 615 0,6% 14 449 0,5% 189 083 6,2% 189 578 6,3% 190 923 6,4% 192 109 6,5% Rover 8 078 0,3% 7 914 0,3% 7 775 0,3% 7 591 0,3% Saab 5 260 0,2% 5 400 0,2% 5 482 0,2% 5 572 0,2% Seat 64 306 2,1% 63 957 2,1% 63 800 2,1% 63 665 2,1% 2

Skoda 170 256 5,6% 164 663 5,5% 162 689 5,5% 161 875 5,5% Subaru 3 902 0,1% 3 880 0,1% 3 874 0,1% 3 881 0,1% 401 987 13,2% 405 119 13,4% 404 128 13,5% 401 300 13,5% Tavria 1 270 0,0% 985 0,0% 789 0,0% 572 0,0% Toyota 118 496 3,9% 120 815 4,0% 121 977 4,1% 123 574 4,2% Trabant 55 469 1,8% 47 544 1,6% 41 824 1,4% 37 435 1,3% 264 213 8,6% 262 227 8,7% 261 832 8,8% 263 869 8,9% Volvo 25 619 0,8% 26 549 0,9% 27 270 0,9% 28 249 1,0% Wartburg 37 699 1,2% 31 794 1,1% 27 375 0,9% 23 966 0,8% Zasztava 6 053 0,2% 4 751 0,2% 3 973 0,1% 3 476 0,1% Total: 3 055 427 100,0% 3 013 719 100,0% 2 984 063 100,0% 2 967 808 100,0% Source: CSO, 2012

As the figures might suggest the bulk of the vehicles is older than 11 years and in the forthcoming years will be older than 12 years.

Average age of passenger cars 2008 2009 2010 2011 Make Total: 10,4 10,8 11,3 11,9 Of which: Alfa Romeo 11,7 11,9 12,3 12,7 Audi 12,2 12,4 12,7 13,1 BMW 10,3 10,5 10,9 11,3 Chevrolet 2,8 3,6 4,5 5,4 Chrysler 9,5 10,2 11,0 11,7 Citroën 8,1 8,7 9,4 10,1 Dacia 12,4 12,1 12,0 11,4 Daewoo 8,1 9,1 10,0 11,0 Daihatsu 17,5 18,3 19,1 19,9 Datsun, Datsun-Nissan 26,4 27,4 28,6 24,7 Fiat 11,0 11,4 11,9 12,6 Ford 9,2 9,5 9,9 10,4 Honda 8,5 8,9 9,4 10,0 Hyundai 7,0 7,5 7,9 8,2 KIA 3,8 4,4 5,1 5,7 Lada 21,0 21,8 22,7 23,7 Lancia 14,1 14,0 14,2 14,4 Maruti 17,0 17,9 18,9 19,9 Mazda 11,1 11,2 11,5 12,0 Mercedes 12,8 13,1 13,6 14,1 Mitsubishi 12,2 12,6 13,1 13,7 3

Moszkvics 25,5 26,9 28,3 29,8 Nissan 8,7 9,1 9,6 10,2 Opel 10,0 10,6 11,3 11,9 Peugeot 8,1 8,7 9,4 10,2 Polski Fiat 22,6 23,7 24,8 26,0 Renault 8,8 9,3 10,0 10,6 Rover 10,5 11,4 12,4 13,3 Saab 8,5 8,9 9,5 10,1 Seat 7,6 8,4 9,2 10,0 Skoda 9,5 9,8 10,2 10,5 Subaru 11,9 11,5 11,4 11,8 Suzuki 7,0 7,9 8,8 9,8 Tavria 14,5 15,5 16,5 17,5 Toyota 7,0 7,6 8,3 9,0 Trabant 22,3 23,3 24,4 25,5 Volkswagen 11,7 12,2 12,7 13,3 Volvo 8,9 9,2 9,6 10,0 Wartburg 21,9 22,9 24,0 25,1 Zastava 22,1 23,0 24,0 25,1 Source: Central Statistic Office, CSO 2012

Like most of other countries, Hungary`s auto market was seriously hit by the global financial crisis, which slashed the country`s auto sales from 176 678 in 2008 to only 61 324 units in 2010. It was reported that over 300 of Hungary`s 1,200 dealerships went bankrupt over the two years following the crisis, and another 300-400 are at risk of going bust. By 2011, sales had gradually recovered to 76 471 units. Market leader Opel Hungary increased the import by 31.6 %, while Volkswagen Hungary’s could realize a more substantial increase of 41%, Hyundai of 42.5 %, Citroén of 42,9%, Dacia of 142%.

Number of passenger cars by make, registered first time in Hungary

2008 2009 2010 2011 Make Pieces % Pieces % Pieces % Pieces % Alfa Romeo 577 0,3% 384 0,5% 385 0,6% 546 0,7% Audi 4 160 2,4% 2 390 3,2% 2 275 3,7% 3 282 4,3% BMW 5 972 3,4% 3 481 4,6% 2 905 4,7% 4 667 6,1% Chevrolet 7 501 4,2% 2 078 2,7% 1 154 1,9% 973 1,3% Chrysler 298 0,2% 150 0,2% 138 0,2% 205 0,3% Citroën 4 603 2,6% 1 507 2,0% 1 470 2,4% 2 102 2,7% Dacia 964 0,5% 434 0,6% 494 0,8% 1 199 1,6% Daewoo 12 0,0% 10 0,0% 27 0,0% 59 0,1% Fiat 6 157 3,5% 2 864 3,8% 2 174 3,5% 2 457 3,2% Ford 19 165 10,8% 8 782 11,6% 6 876 11,2% 7 992 10,5% 4

Honda 4 504 2,5% 2 560 3,4% 1 712 2,8% 1 676 2,2% Hyundai 1 682 1,0% 990 1,3% 1 069 1,7% 1 523 2,0% KIA 3 371 1,9% 1 468 1,9% 1 047 1,7% 1 348 1,8% Land Rover 185 0,1% 72 0,1% 90 0,1% 139 0,2% Lexus 478 0,3% 359 0,5% 257 0,4% 287 0,4% Mazda 3 364 1,9% 1 274 1,7% 1 168 1,9% 1 081 1,4% MCC (Dogan) 170 0,1% 48 0,1% 43 0,1% 67 0,1% Mercedes 4 354 2,5% 2 388 3,1% 2 381 3,9% 3 457 4,5% Mitsubishi 1 316 0,7% 685 0,9% 457 0,7% 554 0,7% Nissan 3 489 2,0% 2 025 2,7% 1 604 2,6% 1 824 2,4% Opel 21 060 11,9% 8 207 10,8% 6 793 11,1% 8 940 11,7% Peugeot 6 588 3,7% 2 400 3,2% 1 965 3,2% 2 450 3,2% Renault 8 183 4,6% 4 559 6,0% 4 723 7,7% 5 571 7,3% Rover 110 0,1% 42 0,1% 35 0,1% 89 0,1% Saab 481 0,3% 305 0,4% 230 0,4% 214 0,3% Seat 3 305 1,9% 960 1,3% 910 1,5% 1 192 1,6% Skoda 10 942 6,2% 3 463 4,6% 4 488 7,3% 4 836 6,3% Smart 306 0,2% 162 0,2% 234 0,4% 317 0,4% Suzuki 25 045 14,2% 8 326 11,0% 2 616 4,3% 2 227 2,9% Toyota 11 011 6,2% 4 421 5,8% 3 266 5,3% 3 571 4,7% UAZ 15 0,0% 9 0,0% 5 0,0% 6 0,0% Volkswagen 13 314 7,5% 6 282 8,3% 6 152 10,0% 8 676 11,3% Volvo 2 223 1,3% 1 609 2,1% 1 269 2,1% 1 727 2,3% Total: 176 678 100,0% 75 837 100,0% 61 324 100,0% 76 471 100,0% Source: CSO, 2012

The scope of consumers range between 20 and 64 years, while the scope of target consumers range between 25 years and 64 years.

Target working population in 2011 (thousand person) 20–24 25–29 30–34 35–39 40–44 45–49 50–54 55–59 60–64 man 153,3 294,8 380,8 372,2 291,8 248,6 261,0 223,7 54,5 woman 122,9 223,3 248.3 296,7 271,7 252,9 267,4 223,0 40,8 Source: CSO, 2012

In the last 5 years parallel with development of the new car registrations, consumer habits have also changed. For example while previously only 30% of new cars were paid in cash and the rest were bought on credit, in 2011, only 9% of purchases were financed by credit. This tendency is probably due not only to the stricter requirements buyers have to meet when applying for a loan but also to the precaution that evolved in people witnessing the struggles of hundreds of thousands of troubled borrowers. 5

As a result of the crisis, there is still one emerging trend that is clearly positive: buyers have become more conscious and circumspect, and try to gain more information about models when considering which one to buy. The hard times have rearranged the popularity list of the cars as well. While before 2008, passenger vehicles accounted for 70% of new car sales and the proportion of fleet vehicles was only 30%, those positions are now reversed, with company purchases propelling the market and providing 70% of the sales. Most business purchases involve middle-class models like the Volkswagen Passat, the Ford Mondeo or the Toyota Avensis, but lower-middle-class models such as the Opel Astra, the Volkswagen Golf, the Ford Focus and the also sell well to companies. The growing popularity of fleet cars at the expense of passenger cars has hit Magyar Suzuki particularly hard, as the company reached its market leading position by focusing on sales of passenger cars and putting less emphasis on fleet vehicles. No surprise then that they have been recently dethroned. Reduced spending power is not the only driver behind the decline in car sales. High petrol prices, currently around HUF 425 per liter, mean people tend to use their cars less and, as such, the amortization time also decreases. Vehicles powered by alternative sources such as electricity or hybrid solutions are far more expensive at the moment. The prices of these cars cannot compete with those of regular ones. Most of the importers agree that global sustainability makes it necessary for carmakers to open up to alternative power sources in the long run, but to make such solutions more widespread, state or EU subsidies would be essential.

The Hungarian market for used cars is showing signs of revival as the number of cars "re- registered" started to grow marginally in the last five months of 2010. The overall trend turned positive this year when 104396 used cars were re-registered by new owners, compared to 98156 in the same period in 2010. Rising sales of used cars is expected to spur growth in demand for aftermarket parts, which are mainly used for auto repair and maintenance. Due to the small scale of aftermarket auto parts production in the country, a good portion of the auto parts sold on Hungary`s aftermarket is imported.

 Characteristics of the components market In Hungary demand for automotive parts basically depends on two factors:  on the one hand, it depends on the annual production volume of vehicles, main parts and modules, which determines the demand for the so-called original equipment manufacturer components,  on the other, it depends on the age and type composition of the automobile pool of the country, which affects the demand for spare parts. An ever-growing number of manufacturers are present on the market of the so-called original equipment manufacturer components, which are produced for industrial assembly. This market, however, poses extremely strict requirements for quality and other aspects, and many of the domestic manufacturers cannot assume the costs they involve (e.g. the costs of implementing the proper quality assurance system). The market of spare parts has been basically characterised by over-supply because the demand for parts in Hungary decreased due to the limited solvent demand. In theory, the demand for road vehicle parts is increased by the fact that the vehicles in the country have become old, however, it paradoxically means a limit at the same time, because the owners of the vehicles to be scrapped are not considered to represent a strong, potential demand on the market of spare parts either. Therefore, the manufacturers of spare parts have to face an extremely strong competition not only 6 on the international market but domestically, too, as the products of the companies that settled in Hungary mean a great challenge to them.

 Total consumption of parts and components

In 2010, as derived from Prodcom data,the total consumption of parts and components is calculated at € 5.6 billion. Total consumption decreased by 4.7% annually between 2006 and 2010. As a result of the economic crisis, consumption showed an irregular growth pattern. From 2006 to 2008, consumption grew by 6.8%. In 2009, consumption fell by 34%, to recover slightly by 10% in 2010. Hungary is the 12th largest market in the EU, after Austria and Slovakia, but ahead of Romania and Portugal. Consumption equalled 2% of total EU consumption. Demand in the OEM segment is estimated to be somewhat under € 5 billion. The aftermarket has fallen as well and now lies under € 1 billion. Growth of both the OEM as well as the aftermarket are expected, but are dependent on the economic fortunes of the country. Over three-quarters of sales in the aftermarket are replacement parts. These can be original equipment spares (OES) or non-original.

Apparent consumption and production of parts and components by category, in € million change 2006 -2010 (Prodcom data)

CONSUMPTION 2010 CAGR ( %) PRODUCTION 2010 CAGR ( %) Total: 5566 -4.7 Total: 5715 1.2 of which of which Bodies and parts 249 2.1 Bodies and parts 328 -1.6 Engines and parts 1548 -11.0 Engines and parts 598 17.0 Drivetrain parts 536 5.7 Drivetrain parts 970 4.6 Vehicle electric 922 8.1 Vehicle electric 1067 4.2 Electric equipment parts 303 -6.3 Electric equipment parts 363 -1.4 Materials 477 19.0 Materials 466 21.0 Other parts and access 1342 -11.0 Other parts and access 1442 -11 Tyres 76 18.0 Tyres 395 247.0 Trailers and trailers parts 112 -5.7 Trailers and trailers parts 86 -6.5

2. Production

The automotive sector is one of Hungary’s core industries and contributes almost 20% of total exports. Over 600 companies employing a total of 100,000 people are active in the sector. Four large automotive Original Equipment Manufacturers (“OEMs”) have production facilities in the country: Suzuki, Audi, GM and Daimler AG. In 2008, Daimler AG chose Hungary for a new investment and will produce 100,000 class A and B cars in Kecskemét from 2012. Audi and Opel (engines) are expanding their present facilities. The export ratio of Hungarian made cars is 94 per cent, a figure that stands at 88 per cent for engine and component production. The number of first- and second-tier equipment manufacturers is continually rising. 14 of the top 20 Tier-1 suppliers, have set up production facilities in Hungary. 7

In Hungary currently there are about 300-350 companies involved in the manufacture of components, including main parts and modules, electric articles, as well as glass, chemical and metallurgical articles etc. for the . These can be classified into 2 categories:  On the one hand, there are companies under exclusively or at least mostly foreign control with a good supply of capital, which manufacture products of the highest quality. These are direct, first-step suppliers of car factories (suppliers of OEM products).  On the other hand, there are traditional manufacturers, which are in majority in number. Actually they are only capable of copying components (manufacturing spare parts) or of doing commissioned work at best. They mostly lack the necessary capacity for production or the proper expertise, and do not have an opportunity for product development because of numerous - mainly financial - limitations. They have more chance to become subcontractors of the suppliers, however, they would even so need capital and technical development.

Car component manufacturers among the Top 200 Hungarian companies and some more Name Profile Audi Hungaria Motor Kft Engines, engine parts, car assemblies Flextronics International Kft Electronic components Opel Hungary Car Manufacturing Kft Engines, gearboxes, cylinder heads Suzuki Rt Car assemblies, sales Rába Vehicle Industries Holding Rt Metal components Videoton Holding Rt Electronic components Visteon Hungary Kft Electro-mechanic components Lear Automotive (EEDS)Hungary Kft Electric motors and components Delphi Packard Hungary Kft Cable harness Hammerstain Bt Seat structures Alcoa European Wheel Products Kft Alu wheel flanges for buses, trucks BPW-Rába Axles Kft Commercial vehicle axles LuK Savaria Clutches Kft Clutch discs ZF Hungáris Kft Gears, gearboxes (comm.vehicles) Ikarus Group Buses and bus components Ikarusbus Vehicle Manufacturing Rt Buses and bus components Sapu Industrial and Commercial Bt Car mirrors, internal lighting Temic Hungary Kft Electronic components Souftec Light Metal Manufacturing Kft Wheel flanges Continental Teves Hungary Kft Screen wipers, ABS sensor, switches Leoni Hungária Kft Cable harness Kromberg Schubert Kft Electric parts, motors, cable harness Knorr-Bremse Kft Brake systems for commercial vehicles

Due to the fact that some large multinational companies chose Hungary to locate their investments, they have attracted a lot of equipment manufacturers and other suppliers. Small and medium-sized local automotive companies have also become stable and strategic partners of both locally-based and Western-European car manufacturers. The Hungarian automotive sector’s cooperation with the local education system is strong and focuses on R&D. Numerous multinationals have set up R&D centres in Hungary, including Audi, Bosch, Knorr-Bremse, Magna-Steyr, Thyssen-Krupp, Arvin Meritor, Denso, Continental, Visteon, WET,Draxlmaier, Edag and TemicTelefunken, ZF, etc.

3. Imports of auto parts and accessories

Without sufficient auto parts production to support its fast-growing auto sector, Hungary heavily 8 relies on imports of auto parts. In terms of auto parts imports, Hungary is the 12th largest market in Europe. Auto part imports there grew strongly until the global financial crisis in 2008, when imports lipped in line with falling auto sales. Most of the auto part imports come from EU countries, which account for 88% of the import bill. Hungary`s annual auto parts imports from the EU have risen by 5% on average over the past five years, mostly from Germany (52), Czech Republic (8.6%), France (5%), Poland (4.1%), Austria (4%). The top four auto parts import items were electric accumulators (8.4%), electrical ignition (7.3%), bodies (6.2%) and parts and accessories incl .engine parts (78%) in 2011. Among the fastest growing import items are brake pads, exhaust pipes, batteries, filters, shock absorbers and exhaust pipes.

IMPORT OF AUTOMOTIVE COMPONENTS AND PARTS 2009 2010 2011 USD 8507 "Electric accumulators, 362 556 954 12.1% 337 749 451 9.9% 341 995 297 8.4% incl. separators therefor, 8511 "Electrical ignition or 200 400 598 6.7% 212 008 317 6.2% 298 966 917 7.3% starting equipment 8707 Bodies, for motor vehicles 226 153 144 7.6% 248 477 544 7.3% 252 741 786 6.2% 8708 Mechanical parts and 2 199 219 365 73.6% 2 603 704 008 76.5% 3 176 096 321 78.0% accessories for motor vehicles Total: 2 988 330 061 100.0% 3 401 939 320 100.0% 4.069.800.321 100.0% Source : Central Statistic Office Source: CSO, 2012

Increasingly, though, Hungary is looking further a field to developing countries to source auto parts at far lower prices. Hungary`s annual auto parts import from developing countries grew by 25% on average over the past five years, compared to an average 16% growth for imports from EU countries. Those auto parts shipped from the developing countries, however, takes a mere market share of 4.5% in Hungary, and may have a great potential to grow in the future. Major auto parts suppliers of the developing countries are China (2.2%), India (0.6%). In the last four years the imports of electrical and mechanical auto parts from Thailand has doubled.

Import from Thailand 2008 2009 2010 2011

Product (according to the Combined Nomenclature) Value at frontier parity in US dollars (USD)

8507 "Electric accumulators, incl. separators therefor, 22 982 3 235 4 586 47 542

8511 "Electrical ignition or starting equipment 0 0 0 12 083 8707 Bodies 1 545 818 369 512 104 651 68 114 8708 Mechanical parts and accessories 1 131 253 350 822 384 592 5 271 004

Total import 2 700 053 723 569 493 829 5 398 743

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 Import regulations:

 Import licence: Not imposed  Import Global Quota: Not imposed

 Quality Controls The Hungarian is member of that multinational agreement, signed in Geneva on March 20, 1958, which regulates the quality of auto parts and accessories. The domestic regulations are in conformity with the international agreement. The concerned regulations enlist those products which have to be officially tested in accordance with the requirements of traffic safety, protection of environment and energy-saving.

The approval mark ( „E” letter written in a circle plus country code, Hungary= 7) issued by the Superintendence of Transport certify the acceptance of the quality of these products. The procedure has to be initiated by the distributors and manufacturers themselves. There are 3 organizations appointed by the Superintendence of Transport to carry out the control –tests. These are the Institute for Sciences of Transport, TRANSINNOV Company for Development of Transport, Research Institute for Labour Safety. Those products which are accompanied by documents (for example: ISO 9001, QS-9000) certifying the quality equivalent to the standard of Superintendence of Transportation are exempted from the test-procedure.

In order to receive the licenses to the distribution traders have to present all the required documents, as follows:  TÜV or ISO certification  Technical drawings  Record of the comparative examination made by an independent institute or  The E7 approval mark

 IMPORT TARIFF and Tax issue Customs Duty: (in 2012) HS No. Description GSP (%) MFN(%) 8507 Electric accumulators 0 2.7 8511 Electrical ignition or starting 0 3.2 equipment 8707 Bodies, for motor vehicles 0 4.5 8708 Mechanical parts and 0 4.5 accessories for motor vehicles

 Value Added Tax: 27%  Environmental fee: An environmental product fee has to be paid for the domestic production, Community purchase and import of certain products.

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Tyres Product Amount of the product fee (HUF/kg) Tyres 52

Other petroleum product Product Amount of the product fee (HUF/kg) Lubricating oil 112

Battery Product Amount of the product fee (HUF/kg) Battery filled up with electrolyte 60

Battery not filled up with electrolyte 80

 Registration tax: Registration tax is payable on motor vehicles registered in Hungary. The tax is payable for import, purchase within the Community, and conversion of the vehicle. The tax amount for passenger cars ranges between HUF 0 and 4,800,000 depending on the age, emission class and technical properties of the vehicle.

4. Marketing

 Distribution channel In the distribution of the OEM parts the commercial network is bypassed – the parts manufacturers supply the assembly plant, main component or module manufacturers directly. The distribution of spare parts, however, is operated on a retail basis. Since hundreds of small shops have shut down under the impact of the 2008 global financial crisis, Hungary`s aftermarket is now dominated by large chain stores and wholesale houses that together control 80% of the market and therefore are the main channels for imports into the country.

 Price, Design Quality Preference Taste Hungarian car owners prefer to buy small and medium size European models. Japanese and Korean cars are becoming also very popular, but their spare parts and components are still expensive. As to the accessories: all the brands running in Hungary have after-sales- service, beside there is an extensive network of other private distributors in parts and accessories. Thai manufacturers could lay more emphases to send price lists and product sheets to leading traders to realize sales.  The potential for Thai products The opportunity for joining to Subcontracting program by establishing joint venture with local car-component manufacturers offer a lot of new business activities for Thai companies. Even to deliver car-components for Japan models can be considered provided the smaller import volume of Hungarian importers is accepted. Thai deliveries in this branch have been symbolic so far, but increasing. Probably initiating connections through the Thai subsidiaries of the international car 11 manufacturers (e.g. GM, Suzuki), marketing trips to traditional Hungarian producers (Raba, Ikarus, Bakony Works) could lead business results in productive parts. Subcontracting program: The Hungarian government is aiming at integrating foreign companies investing in Hungary to the national economy and therefore enhances business between foreign OEMs and Hungarian suppliers. One of the actions taken was the initiation of the supplier program coordinated by the Hungarian Investment and Trade Agency, HITA (www.hita.hu). The principal aim and scope of the Subcontracting Programme is to promote the creation of a circle of medium-sized enterprises with wider and stronger market opportunities, and to support the development of small enterprises closely connected to them. Enterprises that meet the quality requirements of joining the programme and taking part in the training thereof are continuously entered in a database according to the date of compliance with the conditions concerning general management and technical standard. This way the programme makes it possible for domestic and foreign big corporations to get up-to-date information, through the database, on the members, including their products and production capacities, of a qualified and permanently expanding circle of suppliers in Hungary.

 Countries with good access to the Hungarian auto parts market Besides Thailand the following Asian countries have excellent market access to the Hungarian auto parts market: China, Japan, Korea, Taiwan, India and Malaysia.

Multinational car manufacturers attracted their traditional foreign suppliers to Hungary. For instance, Sumitomo, the Japanese cable strand manufacturer made a greenfield investment in Hungary with the purpose of providing supplies to Suzuki. Other examples include the Tatabánya-based Suoftec Könnyűtermék-gyártó és Forgalmazó Kft., established jointly by the German Otto Fuchs Metallswerke and the Dutch subsidiary of the American Superior Industries, manufacturing pressed and cast disk wheels. Another Székesfehérvár-based greenfield investment project is the diesel oil supply unit manufacturing facility of Denso, a company owned by Toyota Motor Corporation. The German Knorr Bremse in city Kecskemet produces modern braking systems. In addition to the ABS braking systems, it manufactures DSC driving stability control systems, brake valves and railway braking systems.

 Constraints and obstackles to Thai products

There is no any.

5. List of importers with emphasis on major ones List enclosed.

6. Related organization/Association in Hungary

Association of the Hungarian Vehicle Component Manufacturers H-1119 Budapest, Bártfai u. 5/B Tel./Fax: (361) 203-8144 E-mail : [email protected] www.majosz.hu

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Hungarian Vehicle Importers Association H-1132 Budapest, Váci út 18. (WESTPOINT Business Center) Tel/Fax: (361) 239 6029 E-mail: [email protected] www.mge.hu

The Association of the Hungarian Automotive Industry(AHAI) H- 1119 Budapest, Thán Károly u. 3-5 Tel/Fax: (361) 371 5874 E-mail: [email protected] www.gepjarmuipar.hu

7. Related trade fairs in Hungary

INFORMATION: HUNGEXPO Co. Ltd. 1101 Budapest, Albertirsai út 10. (Expo tér 1.) Letters: 1441 Budapest, Pf. 44. Phone: 263-6000, Fax: 263-6098 E-mail: [email protected] web: www.hungexpo.hu www.automobil.hungexpo.hu

Autotechnika Trade show will be held in the Hungexpo Budapest Fair Centre between Oct 24 and October 26, 2013. The fair presents the full range of the vehicle maintenance industry's garage industry products, parts and accessories together with its servicing, fitting, repair and remanufacturing technologies. Various conferences are staged during Autotechnika and topics include how to manage scrap cars, gas motoring, diesel technology and the situation of car industry suppliers.

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Thai Trade Center Budapest Harangvirag u.5. 1025 Budapest, Hungary Tel: (361)212 2738 e-mail: [email protected]