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Insight into the Hungarian Automotive Industry in International Comparison

Author

Listed:
  • János Rechnitzer

    (Head of the Department of Regional Studies and Public Policy at the Széchenyi István University)

  • Róbert Hausmann

    (Magyar Nemzeti Bank (Central Bank of Hungary))

  • Tamás Tóth

    (Magyar Nemzeti Bank (Central Bank of Hungary))

Abstract

The paper examines the features of the Hungarian automotive industry1 in international comparison, in the form of a descriptive analysis. The comparison focuses primarily on the automotive industry of the Visegrád region, Germany and Austria, as well as on processes in the EU. The analysis reviews the academic background of the sector, and then provides an insight into the history of the automotive industry of the Visegrád region, focusing on the socialist past of the automotive industry and the consequences thereof. In the last part of the analysis, we compare contemporary Hungarian industry trends with the features of it in the Visegrád countries and Europe, based on the statistics of Eurostat, by company size and ownership structure, as well as on the corporate income tax return database of the Hungarian tax authority (NAV). The main conclusion of the paper is that the automotive industry shows outstanding productivity within the Hungarian national economy, but on the other hand, the SMEs of the sector are less productive than large enterprises and this difference is the highest in Hungary within the region. In order to change the situation, large foreign enterprises should outsource their higher value added activity in the region and raise wages accordingly, and on the other hand, it would be necessary to strengthen and advance Hungarianowned SMEs within the value chain.

Suggested Citation

  • János Rechnitzer & Róbert Hausmann & Tamás Tóth, 2017. "Insight into the Hungarian Automotive Industry in International Comparison," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(1), pages 119-142.
    • Handle: RePEc:mnb:finrev:v:16:y:2017:i:1:p:119-142
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    References listed on IDEAS

    as
    1. Yannick Lung, 2004. "The changing geography of the European automobile system," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 4(2/3), pages 137-165.
    2. Slavo Radosevic & Andrew Roziek, 2005. "Foreign Direct Investment and Restructuring in the Automotive Industry in Central and East Europe," UCL SSEES Economics and Business working paper series 53, UCL School of Slavonic and East European Studies (SSEES).
    3. Stewart MacNeill & Jean-Jacques Chanaron, 2005. "Trends and drivers of change in the European automotive industry: (I) mapping the current situation," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 5(1), pages 83-106.
    4. Torlak, Elvisa, 2004. "Foreign Direct Investment, Technology Transfer, and Productivity Growth in Transition Countries Empirical Evidence from Panel Data," University of Göttingen Working Papers in Economics 26, University of Goettingen, Department of Economics.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    competitiveness; labour productivity; V4 region;
    All these keywords.

    JEL classification:

    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition

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