One billion euro investment by Mercedes progresses smoothly in Hungary
During his keynote speech, Zoltán Bán, CEO of Portfolio Group, pointed out that next year the cooperation between Portfolio Group and MAGE will be 20 years old, but the challenges faced by car manufacturers in the past decades have rarely been as great as in the recent period. Never before has there been such a need to work together, as there is an increasing number of competitors both in technology and in business, and the sector is also being squeezed by EU legislation.
Csaba Kilián, Executive Secretary General of the Association of the Hungarian Automotive Industry (MAGE), also identified maintaining the competitiveness of European car manufacturers as the biggest challenge, saying that from a broader perspective this is about the whole European industry. ACEA, the European Automobile Manufacturers' Association, published a five-point manifesto at its last general assembly in 2023.
The ACEA's five policy recommendations for the next five years are:
- Time for an ‘Industry Deal’: Put industrial strategy firmly back on the agenda
- Take a strategic view: Rethink the regulatory framework
- Stay in the race: Make sure we can be competitive globally
- Keep an open mind: Make technology neutrality a guiding principle
- Keep Europe moving: Preserve the mobility of people and goods
Electrification, self-driving technology and the transition to a circular economy, as well as these goals, can only be achieved with serious industry and legislative collaboration.
EUR 1 bn investment in Kecskemét progressing well
Jens Bühler, director and CEO of Mercedes-Benz Manufacturing Hungary Ltd., highlighted the importance of the Kecskemét plant in the Mercedes ecosystem. The manufacturer has been in Hungary for 16 years, and its 1.5 millionth locally-produced car rolled out of the plant in 2021.
The future of the factory is not only assured, but it will also be further expanded with a major investment of more than €1 billion, doubling the number of workers, for example.
Last year, 174,000 cars were produced on 441 hectares, by 4,500 workers in three shifts per day. The future of the factory will also be shaped by electromobility, but in the meantime plug-in hybrid and conventional petrol or diesel cars will be produced.
Kecskemét is one of the few Mercedes plants where both electric drive trains and conventional engines can be installed.
The strength of the factory lies not in its financial capital and infrastructure, but in the team that runs the facility, which combines German precision with home-grown passion, he said.
Solution-focused thinking, agility and diligence make a great combination. Since the factory started operations, more than 5,000 innovations and ideas have been implemented, and our local colleagues excel when creative solutions are needed. The company encourages this through a series of in-house competitions or the "Idea of the Month" award, he added.
More than 60% of the factory's managers are Hungarian, and the proportion is growing, and Mercedes is doing much to help, with multilingual training and university/secondary cooperation to help train new employees.
Everyone should be aware: electricity prices will never be low again
One of the key factors in the profitability of industrial production is the price of the energy used. Whereas before the energy crisis electricity cost around €50/MW/h, the price suddenly jumped to well over €100, and after a slight consolidation, it is now quoted at €88 for 2025," said András István Tóth, Solutions Sales Director at E.ON Hungária Group.
The share of green energy is growing at a staggering pace, increasing to 3m241 MW in a year, up from 2m169 MW last year.
And with the addition of household-scale power plants or rooftop solar panels on factories, solar power generation in Hungary has climbed to over 6,000 MW of capacity. The original plan was for the country to reach this figure by 2030, but market trends have made it much more profitable for investors to build photovoltaic power plants than before. This is why the national energy strategy foresees 11,000 to 12,000 MW of renewable capacity by 2030, including wind power.
The capacity of conventional power plants is also 6,000 to 7,000 MW in Hungary, but due to the continuous increase in energy demand, the lifetime of the lignite-fired Mátra Power Plant, the country's largest CO2 emitter, would be extended by another 3-4 years.
However, the construction of energy storage capacities is urgently needed, as electricity prices can even fall into negative territory during peak production periods.
Of course, this can also be an advantage for manufacturers who are relatively flexible in their manufacturing activities, for example, because energy-intensive production processes can be timed to take place when energy is cheaper.
Some small changes in work organisation can save significantly more resources and increase competitiveness. The increased demand for green electricity can be most effectively sourced through so-called PPA contracts, which provide green energy for the long term. E.ON has a specific solution for this, which it can offer to automotive operators.
A power purchase agreement (PPA), or electricity power agreement, is a long-term contract between an electricity generator and a customer, usually a utility, government or company. PPAs may last anywhere between 5 and 20 years, during which time the power purchaser buys energy at a pre-negotiated price. Such agreements play a key role in the financing of independently owned (i.e. not owned by a utility) electricity generators, especially producers of renewable energy like solar farms or wind farms. (Source: Wikipedia)
Cover photo and photos in the article: Portfolio - Ákos Stiller
