South Korean electronics producer Samsung is set to invest HUF100bn (€322mn) in a plant close to the Hungarian capital that will produce electric vehicle batteries, local press reported on August 30.
The investment is one of several in the auto sector announced this year. While the trend is welcomed by Budapest, it is becoming clearer that the Hungarian economy risks growing too dependent on the auto sector. At the same time, with a €1.6bn investment due from Daimler, and suppliers also piling in, the tightening labour market is becoming a serious challenge to further expansion.
Peter Szijjarto, Hungary’s foreign minister, said Samsung’s investment in the town of God will create 600 new jobs. “Hungary will invest in local infrastructure and God will give Samsung corporate rebates,” Szijjarto said, adding that this was necessary because current EU regulations don’t allow the state to offer aid to support investment in the vicinity of Budapest.
The factory is planned to start production in 2018 to produce batteries for 50,000 electric vehicles per year. The plant will "help us save logistics costs and quickly cope with demand from customers, as European companies have manufacturing bases around Hungary," Reuters quoted a statement of Samsung SDI.
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