Place and Promotion13
Market Opportunity Analysis
Legal Environment, Government
The number of passenger car in Hungary is 305 per 1000 people according to the European Automobile manufacturers association. The estimated car sales in Hungary is 3 Million and from the sales figures it would take 60 years for all cars in Hungary to be exchanged for a new one. As per PWC report it shows that majority of Car dealers in Hungary are Family businesses that are usually associated with 1 national distributor. The majority of distributor operates in the Budapest area or the Pest County. Most of the dealers present in Hungarian market for more than 5 years now.
The main players in the automotive sector are Audi, Suzuki, Opel and individual multinational suppliers as well as the traditional Hungarian manufacturer Rába. Counting more than 600 players the country is widely considered as the supplier base for the manufacturers established in the region. There are outstanding opportunities for joint production with companies in the region, and also specific new opportunities in technology and know-how transfer. Especially after the 2007 EU enlargement, Hungary has gained a more central position in the EU area, and there is optimism that the established automotive industry may see growth opportunities stemming from this. Low labor costs, cost of transport, communications and general living is lower in Hungary compared to other countries. Hungary being the Advanced emerging country in Europe. Because of the strong growth in middle class income group people and that of premium group segment, overall demand of automobiles, be that a car or a bike attained great heights. Today, Hungary has a population of 10 million and a car fleet of nearly 3 million cars. In 2007, it produced 290,235 passenger cars and 3,566 commercial vehicles. The revenues for 2007 amounted to € 15.9 billion, and the automotive sector share represented 19.4% of total industrial production. The share in total exports was about 20%. There are approximately 630 motor-vehicle manufacturing companies; from this, circa 240 have audited quality assurance systems. The number of employees in the sector is approximately above 110,000, including a considerable number of highly skilled workers. Proportion of employees involved in main-unit manufacturing is 12% and in part-unit manufacturing, 88%. Entry strategies used by various Automobile companies in Hungary Large multinational firms play a very significant role in the national economy, accounting for the overwhelming proportion of the nation’s GDP, exports and R&D activity. Hungary has successfully mastered economic transition benefiting from its geographic location and attracting an important share of foreign direct investment in central and Eastern Europe. Among the most important investments made over the past year are the following: •German giant Daimler has decided to invest € 800 million creating 2,500 jobs to build Mercedes A and B class in Kecskemét. The factory will produce 100,000 cars annually from 2011; •Audi Hungária Motor Ltd., invested € 80 million in its new machine-tool factory in Győr; •Renault-Nissan has invested € 13 million to set up a regional spare parts supply centre in Győr for the Hungarian, Slovak, Czech, Slovene and Romanian markets; •Japanese Denso has recently invested...