The Hungarian government has approved US$61m of direct subsidies for Audi to help fund its expansion in the country and a further US$30m for General Motors’ Opel.
The two car makers are expanding their plants in the western Hungarian towns of Gyor and Szentgotthard.
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Economy minister Gyorgy Matolcsy told a news conference that the two projects would create 2,634 new jobs directly and 17,500 when taken together with new jobs at domestic suppliers.
Audi plans to lift output to 125,000 vehicles a year once its expanded plant at Gyor begins full operations from 2013.
Matolcsy said the government expected the subsidy to Audi to pay off within three years from the start of higher production, by the end of 2015, while the GM subsidy would return within five years.
Daimler new US$1.1bn Mercedes plant in the central town of Kecskemet is also expected to start production in 2012.
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By GlobalDataMatolcsy said these three projects combined would add two percentage points to the contribution of the car sector to Hungarian GDP, lifting it to around 5% of economic output from 3.1%.
Vehicle exports will also account for 16-18% of all Hungarian exports in the years ahead, Matolcsy added.
