Despite the global downturn in sales Magyar Suzuki in Hungary still produced a record number of vehicles last year.
Go deeper with GlobalData
Total production reached 281,000 vehicles, 19,000 short of the Esztergom plant’s capacity, but the company does not expect to get anywhere close to that this year as the slowdown in sales continues to bite while production was idled for several days earlier this year when Russia shut off its gas supply to central Europe during its dispute with neighbouring Ukraine.
Chief executive officer Hisashi Takeuchi says he expects output to drop to closer to 200,000 this year. The plant produces the Suzuki Swift small car, the Splash small MPV and the SX4 SUV. It also builds the Agila for Opel, a rebadged Spash, and the Sedici SUV for Fiat which is based on the SX4.
Takeuchi says he expects to continue producing the Fiat and Opel models for the foreseeable future while investment in the plant is concentrating on increasing automation, for quality reasons, he stressed, rather than a need to reduce the 4,400-strong workforce.
“We are aggressively introducing robots into the welding operations to improve quality but in terms if efficiency we are already identical to our motherplant in Japan,” he added.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataA car rolls off the Magyar Suzuki plant at a rate of one every 63 seconds which Takeuchi said is well ahead of an industry average which is closer to two minutes.
All the different models run along the same assembly line and the plant has the added complexity of eight different engines, all of which are imported. Five petrol engines are shipped from Japan, 1-litre, 1.2-, 1.3-, 1.5- and 1.6-litre. There are also three diesels, a 1.6-litre from PSA Peugeot Citroen, a 1.9-litre from Fiat’s Polish plant and a new 1.2-litre, co developed by Suzuki and Fiat which imported from India.
With such a large range of engines Takeuchi said there is insufficient volume to establish a European engine plant. Nor is there room to expand the Esztergom car plant which is locked in by other buildings. He added: “The only space available to us is the new vehicle parking area and if we build on that then we have nowhere to put the cars.”
It’s another reason why capacity cannot be increased beyond 300,000. With 8,500 parking spaces available, the park quickly fills up with production running at close to 600 vehicles a day on the two 10-hour shifts.
Production last year was 21% up on the 2007 total of 232,500 and the company has a market leading 16.7% share of Hungarian new car sales. Some 260,600 of 2008 production was exported, mainly to Europe although the Splash is also shipped to Japan.
Takeuchi said that the plant is benefitting from recently introduced sales incentives in a number of European countries because of the small models it produces. He added that he expects this to continue through the year.
The Magyar Suzuki plant was opened in 1992. It signed the agreement with General Motors to produce models for Opel and Vauxhall in 1998. The partnership with Fiat started in 2006.
Chris Wright
‘CJ’
