The year of 2013 brought about a positive U-turn also within the vehicle manufacturing sector, as output in this division grew by 32 percent and the number of new jobs was up by 2000, Minister for National Economy Mihály Varga said in Kecskemét, at the Deloitte car industry conference entitled “Innovation.Incubation.Financing.”

The car industry produced goods valued at EUR 18bn, which constituted 18 percent of total Hungarian manufacturing industry output, 10 percent of GDP and 18 percent of total export volume, the Minister said adding that currently 726 vehicle manufacturers are active in Hungary, which directly provide jobs for more than 120 thousand people.

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Mihály Varga pointed out that this achievement has turned Hungary into one of Europe’s main vehicle manufacturing centres, as the sector’s contribution to GDP averages only 4 percent within the EU. He stressed that market outlook is highly favourable, as global demand of cars has been on the rise: according to the International Energy Agency, the number of cars sold worldwide will double by 2050.

He emphasised that for the future sustainable development of the Hungarian vehicle manufacturing sector it is an important fact that large enterprises active in Hungary consider the Government’s R&D policy a competitive edge. In Hungary there is a world-renowned academic and university education as well as an innovation, research and development background, and the intellectual capital resulting of that has been a key factor behind the decision of leading manufacturers to increasingly establish R&D centres in the country.

He said more and more car manufacturers are endeavouring to engage Hungarian higher education institutions and research centres into R&D&I projects, which trend is underpinning one of the key efforts of the Government: to turn Hungary into an innovation hub instead of a purely manufacturing one. The Government’s innovation policy envisages 20 then 30 world-class innovation centres operated by large enterprises by the end of the current term and by the end of the decade, respectively.

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He called the introduction of a practice-oriented vocational training scheme a key step, which was launched – for the first time ever within the Hungarian higher education system -- in September 2012 at the Kecskemét College in cooperation with Mercedes Benz and Knorr-Bremse.

He stressed that the car industry is facing immense challenges and it needs massive technological innovation to address these. We are going to witness, he predicted, the increasing popularity of hybrid, electric and then hydrogen-powered vehicles. The International Energy Agency is prognosticating that by 2050 70 percent of cars sold worldwide will be electric or hybrid vehicles.

He called attention to the fact that while over the previous decade the ratio of R&D spending relative to GDP was around 1 percent, it has been rising steadily since 2010 and the Government has set the medium-term strategic goal to bring this figure to 1.8 percent by 2020. In line with this objective, Hungary will spend EUR 2.1bn on R&D in the current EU fiscal period, which amount is twice as much as the cohesion fund received in the previous period.

As the Minister said, output at the vehicle industry is expected to be even higher in 2014 compared to last year, as some investment projects are only now operating at full capacity. At Mercedes-Benz, for example, people work in three shifts.

(Ministry for National Economy)