Car industry giants to shut down in Hungary – huge economic problems on the horizon?

A significant part of the Hungarian GDP comes from automotive giants like Audi, Opel, Suzuki and Mercedes. Now, they all announced that they would stop production for weeks which can cause serious harm to the Hungarian economy and the budget of the country.

According to totalcar.hu, Opel announced yesterday that they would halt production at its plant in Szentgotthárd from next Monday because of the coronavirus epidemic. Zoltán Kaszás, communications leader of the company, added that they did everything in the last few weeks to prevent an outbreak of the epidemic in their plant. For example, they introduced a stricter tidying system, prescribed rigorous hygiene rules, tried to minimise contacts between their workers and checked the temperature of the drivers coming to the factory. Furthermore, they reduced the number of business trips and welcomed fewer visitors. 

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He told that they were successful in implementing the measures mentioned above since

there were no infections among the workers of the plant.

However, now they do not have any other choice but to halt production in the plant. 

Totalcar wrote before that from January 9 this factory made the 1.2L petrol PSA engines for many types of Peugeot, Citroen and Opel and the relevant investments cost 12.5 billion HUF for the owners.

Later that day, Suzuki plant in Esztergom announced that they would stop production from next Monday until April 3 – portfolio.hu reported. The reason for the decision was to protect their workers from the coronavirus epidemic. They added that they do everything to reopen as soon as possible. 

The Daimler Group also announced yesterday that they would shut all their plants in Europe for two weeks but they added that

all employees will receive their salary during that period.

Even though the company did not talk precisely about their plant in Kecskemét, local workers say that from next Monday they will close, as well – hvg.hu reported. Companies in the car industry emphasise that the closures happen not only because of the epidemic but also because of the collapse of the car trade and transport industry. According to the latest information, 4,400 people worked in the Mercedes plant of Kecskemét.

The car industry is a strategic sector of the Hungarian economy, giving more than 25 pc of the industrial production and five pc of the Hungarian GDP. According to portfolio.hu, each month of a halt in the case of Győr’s Audi and Kecskemét’s Mercedes means a 0.2 pc reduction in the Hungarian GDP.

We reported yesterday that German carmaker Audi would halt production at its plant in Győr, northwestern Hungary, next Monday due to the coronavirus pandemic and uncertainties in component supply.

Source: totalcar.hu, hvg.hu, portfolio.hu