April 23, 2019 Tuesday
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India investment mission
A delegation of leading executives of the Automotive Component Manufacturers Association of India (ACMA), the apex body representing the interest of the Indian Auto Component Industry, has paid a visit to Hungary recently as part of their Investment Mission that also included visits to Poland and Slovakia. The Indian automotive industry is currently represented by four companies in Hungary: SMR, Apollo Tyres, SNP and Sona.
Diplomacy&Trade online | March 28, 2019

During their stay, the delegation met with the Indian Ambassador to Hungary, Kumar Tuhin at the Embassy. They visited the Hungarian Parliament and met with Péter Cseresnyés, President of the Hungarian-Indian Parliamentary Friendship Group and had a guided tour in the building. Afterwards, they had a B2B meeting organized at the Hungarian Investment Promotion Agency (HIPA) with presentations and speeches by representatives of organizations and associations of the automotive industry in Hungary.  It was there that the delegation signed a Letter of Intent with Hungarian Automotive Component Manufacturers Association (MAJOSZ) on future cooperation. Their itinerary ended with a networking seminar organized by the Embassy.

An exploratory mission

Indian automotive industry suppliers have begun to expand abroad in the recent years. This branch of industry in India is very strong, with the majority of big OEMs having plants there. While in Hungary, there are about 700 automotive suppliers, in India, this number is about ten times higher. Companies there have traditionally worked for the market within the country but now, they can be seen appearing in Europe, as well, through greenfield investments and acquisitions. A fine example for the latter in Hungary is the SMR Group, which has shown great development in this country, while the large factory of Apollo Tyres is the result of a greenfield investment east of Budapest, and is the most modern plant of the company globally.

Firms represented in this latest delegation were primarily interested in cooperation with Hungarian partners of a technical nature, in technology exchange, in the opening of a representation office and in trade. The larger, financially strong companies that have substantial market presence in Europe are likely to consider forming joint ventures with, or acquisitions of, Hungarian ventures – apart from the greenfield investment option. This is something that Hungarian SMEs should expect.

An industry still growing

One must take into consideration a process that members of the Indian delegation were also aware of:  the automotive industry in Hungary is still in the phase of expansion with Mercedes and Audi increasing capacities and BMW establishing a new factory, for instance. The Executive General Secretary of the Hungarian Automotive Industry Association (MAGE), Csaba Kilián estimates that the current combined production capacity of assembly plants operating in Hungary, that is now approximately 500,000 vehicles, may grow to around 800,000 by 2021-22.

The delegation from India was here to get an impression of the automotive industry. The President of ACMA, Ram Venkataramani said that the information gathered in Hungary and the other two countries would be passed on to the association’s 830-plus members. He added the delegation would be leaving with "a very positive feeling" about the incentives and possibilities that Hungary could offer. The more important automotive companies in India are very likely to move to European markets in the coming years. For Hungary, they are important from the investment point of view and with consideration to the arrival technologies that represent added value.

INDIAN AUTOMOTIVE FIRMS IN HUNGARY

SMR

The predecessor of SMR Automotive Mirror Technology Hungary was established in 1995. It was acquired by the SMR group (Samvardhana Motherson Reflectec), one of the 23 largest automotive suppliers worldwide in 2009. SMR has units in Mosonmagyaróvár, Mosonszolnok and Hegyeshalom (all in NW Hungary) and Túrkeve (in the eastern part of the country), and employs more than 2,400 people in this country. SMR develops and manufactures rear view mirror system and intelligent camera technologies for the automotive industry. It is present in 16 countries, with over 10,600 employees worldwide.

Apollo Tyres

Apollo Tyres started building a factory in Hungary in 2015, its 6th global tire manufacturing plant, which is the first greenfield investment for the company outside of India. It was operationalized in early 2017 (see picture), providing employment to about 700 people, with a total investment of about USD 630 min (EUR 475 million). According to the company, this investment aims to strengthen its European presence to become a TIER1 supplier of the main European original equipment manufacturers (OEMs).

Apollo Tyres Ltd has been in the business of manufacturing and selling tires for 40 years. The company, with an annual turnover of about USD 2 billion and a global workforce of approximately 16,000 employees, has 6 manufacturing units in India, in the Netherlands and in Hungary, and exports to over 100 countries.

SMP

As a subsidiary of SMR Group, Samvardhana Motherson Peguform (SMP) is one of the world's leading experts in the field of plastic technologies. In addition, it is considered one of the world's largest suppliers in the areas of car upholstery, dashboards and bumpers. It completed a bumper manufacturing plant in Kecskemét, southeast of Budapest, in an area of 96,000 square meters in November 2017, producing bumpers for Mercedes cars (to be used in the nearby Mercedes assembly plant) with more than 600 employees. The investment value is considered to be HUF 31 billion (appr. EUR 100 million).

SONA BLW

The SONA BLW Group opened its new HUF 1.3 billion (appr. EUR 4.2 min) plant in the town of Polgár in May, 2017 and is manufacturing components (semi-finished automotive steel products such as gearboxes, clutches, shaft, engine and chassis parts) for the automotive industry, with 43 employees. The Group specializes in the manufacturing and installation of forged precision conical wheels and change wheels, baulk rings, undercarriage parts, engine and power transmission parts and complete differential gears, primarily for the automotive industry. Their customers include a number of renowned light and heavy truck manufacturers, manufacturers of agricultural and heavy machinery and TIER1 suppliers. SONA employs more than 2,300 workers at its seven plants over the world.

   
   
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