The Government intends to establish a business and regulatory environment which is capable of combating activities by illegal car mechanics, Minister of State for Employment Policy Sándor Czomba said at the ceremony to mark the conclusion of an agreement between the Ministry for National Economy and the Hungarian Association of Automobile Dealers (GÉMOSZ).

In recent years, 60 percent of authorised car dealerships and more than half of legitimate car repair workshops have closed down, President of the Association Gábor Gablini said, adding that providing legal service providers gain ground as a result of the agreement, GÉMOSZ members may hire 4 000 new employees in the next four years, while the crisis has eliminated 20 thousand jobs.

The Minister of State also said that the Government is combating illegal car repair workshops via state supervision and fines. In this fight against the black economy, the Government hopes to rely on local governments, the tax authority, the consumer protection authority and partner institutions.

The annual turnover of the car maintenance sector totals HUF 1000bn, and illicit repairs constitute 70 percent of this sum. As illegal service providers active in this segment do not pay taxes and contributions, they cost less than legal repair workshops, but – as test purchases have proven – work done by these underhand car mechanics does not cost less as a whole, Gábor Gablini stressed.

This black market segment also generates various public safety issues, as repairs are often made with parts that originate from stolen cars. In addition, no record is kept of motor oils and the parts they utilise. Disposal of used oils and the emission levels of fixed engines also raise environmental problems, the President explained.

In Europe, the average charge for car repair is EUR 35-40 (HUF 10 500-12 000) per hour. In Hungary, the respective legal hourly rate is HUF 5000, which is cheap compared to European prices, but still high in comparison to illegal rates.

The Secretary General of the National Association of Entrepreneurs and Employers Ferenc Dávid stressed that in view of the fact that during the EU fiscal period of 2014-2020 Hungary will spend the majority of funding on economic development and that can only be allotted to legal enterprises, this process will result in more transparency within the sector.

(Ministry for National Economy)