The Strategic Partnership Agreement, between the vehicle industry supplier Delphi’s Hungarian group of companies and the Government of Hungary, was signed by Minister for National Economy Mihály Varga and Delphi Hungary Manager Zoltán Jámbor in Budapest.

This agreement is the 38th of its kind concluded between the Government and a large company.

DownloadMihály Varga emphasised that it is key for Hungary’s development to integrate into the Hungarian economy companies capable of achieving global success with their high added value products. To achieve this, he added, close cooperation between the Government and companies is inevitable.

Zoltán Jámbor pointed out that the vehicle manufacturing industry has been one of the most innovative and productive business sectors world-wide, and suppliers like Delphi produce some 75 percent of the value of a vehicle and they are developers of new technologies.

Prior to the signing, Minister of Defence and Szombathely-delegated MP Csaba Hende held a welcome speech, stressing that Delphi’s success story in Hungary began in 1991 in Szombathely, where the company currently employs 1500 people and pays business tax of more than HUF 1bn a year.

Mihály Varga stated that throughout its history in Hungary Delphi has consistently pursued the policy of integrating into the Hungary economy. The company’s cooperation with Hungarian technical schools and universities has been a telling example of this approach. This effort had been in accordance with the Government’s active investment policy and as a result the Strategic Partnership Agreement could be finalized.

The Minister emphasised that in light of Delphi’s investment projects one has good reason to believe that the company’s experiences in Hungary have been positive and they have been satisfied with the domestic business environment. In his view, Hungary’s economic potential lays in discovering its own comparative advantages and exploiting the competitive edge built upon them.  He explained that for the Government the most important objectives are boosting employment and investment as well as improving the competitiveness of the Hungarian economy. Results are aptly demonstrated by the fact that after last year’s positive economic U-turn the question for Hungary is no longer whether the economy can achieve positive growth but how large growth will be. The Government presumes growth of 2 percent in this year’s budget, but several analysts are prognosticating a higher figure, he stressed.

He also underlined that in comparison to January 2010 industrial output increased by 12 percent and the vehicle sector’s output surged by 41 percent. He added that since the second quarter of 2013 the volume of investment has also risen markedly and it began to increase after a four-year period of decline. The Minister declared that the Hungarian economy is capable of generating significant growth while it can also maintain a positive trade balance and increase the current account surplus. Since the beginning of 2010, he continued, the amount of FDI flowing to the country has exceeded EUR 7.4bn and thus the volume of FDI jumped by 11 percent until the end of Q3 2013. Domestic consumption has been gradually gaining significance as driver of the sound economic recovery. He also mentioned that the activities of the group of companies owned by Delphi in Hungary have also contributed to these economic results.

Zoltán Jámbor stated that when a company is contemplating the launching of new investment projects several important criteria must be evaluated and fulfilled: the company must be close to its consumers, and it must find skilled labour force and competitive suppliers. Hungary has met every requirement and that is why Delphi – assisted also by the Government and the knowledge of Hungarian professionals – has Hungarian subsidiaries which represent all five of its divisions. The company operates four plants in Hungary, they have invested more than EUR 220 million in the country and they currently have 3400 employees in Hungary.

In the opinion of Zoltán Jámbor, the Hungarian business environment has been facilitating production at top technology companies and it underpins production processes, from the infrastructure to skilled labour force. Therefore, everything required for providing the most demanding European vehicle makers with high-end products has been made available for Delphi.

Csaba Hende pointed out that Szombathely is thankful to Delphi and proud of the people who have laid the foundation of success with their knowledge, diligence and work. The Minister of Defence stressed that the Government categorized in 2012 the Western Pannonia Vehicle and Mechatronics Centre, which brings together professionals from local companies, chambers of industry and trade, municipalities and scientific institutions, as a priority development centre. As Csaba Hende informed the audience, the companies of the Western Pannonia Vehicle and Mechatronics Centre plan to channel HUF 90bn into new investment projects over the next three years and create directly 3500 new jobs. Thanks to the industrial upswing in place since 2010 – driven also by the Government’s reindustrialization policy – business tax receipts in Szombathely increased by 45 percent, and it also signals the dynamic growth of company output, he said adding that the unemployment rate of 4.7 percent is also well below the country average.

(Ministry for National Economy)