Denso to expand Hungary car parts plant
Date: 14-Jun-04
Country: JAPAN
The expansion of the plant in Szekesfehervar, where Denso also produces diesel injection pumps and engine-related components, will create 1,000 new jobs, it said.
The expansion will bring annual production to 700,000 units by 2006 from 300,000 now.
The common rail system, which uses electromechanics to control the amount of fuel injected into car engines and which can reduce exhaust emissions, will mainly be supplied to Toyota Motor Corp (7203.T: Quote, Profile, Research) and Ford Motor Co (F.N: Quote, Profile, Research) , Denso said.
Denso did not give the amount of the subsidy it would receive from the Hungarian government.
Hungarian daily Nepszabadsag reported on Thursday that Hungary was planning to grant investment subsidies worth some 30 billion forints ($144.2 million) to eight foreign firms to attract capital in a race with other EU states.
Hungary has already signed a contract with German auto parts supplier Robert Bosch, to invest an additional 150 million euros in its Hungarian plant by 2006, and U.S. oil giant Exxon Mobil (XOM.N: Quote, Profile, Research) , which plans to set up a regional service centre.
New European Union entrants in Central Europe have been competing for years to attract the service and development centres of multinational firms with tax concessions, subsidies and a cheap and skilled labour pool.
Foreign direct investment is especially important for Hungary as it seeks to fill a current account deficit which is expected to be in excess of eight percent of gross domestic product this year.
