ThyssenKrupp is to build a new automotive components plant in Hungary. The company will invest around EUR100m in a new production site for engine components and steering systems.

Construction of the plant in Jászfényszaru, 70 kilometers east of Budapest, will start in spring 2016, with production of electronic power-assisted steering systems and cylinder head covers with integrated camshafts planned to commence in 2018. ThyssenKrupp will create around 500 new jobs at the site in the coming years, it says.

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The company says the expansion of production capacities in Hungary is necessary because ThyssenKrupp's components division has recently acquired major orders from international OEMs.

Dr. Karsten Kroos, CEO of ThyssenKrupp's Components Technology business said: "This investment follows our strategy towards standardization and cost optimisation in the automotive components business. For the first time in Europe we are localizing production of two different technologies at one site. That will be an immense help in offering competitive cost structures. We have already enjoyed success with this strategy in China and will also be employing it in other growth markets."

In Shanghai, ThyssenKrupp opened a chassis components plant in 2014 producing both steering and damping systems. The main advantages of the approach are central project planning, joint use of plant infrastructure, faster implementation of improvement measures and lower administrative costs.

For electronic power-assisted steering systems alone the company says it has received auto industry orders worth around seven billion euros in recent months. It adds that demand for cylinder head cover modules with integrated, assembled camshafts is "still high". The special design of the module permits customers weight savings of up to 30%, it claims, for lower fuel consumption and reduced emissions.

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"Hungary offers good conditions for our growth plans. Its central location, good infrastructure and highly skilled labor force are the main reasons for expanding our business activities in Hungary," said Kroos.

ThyssenKrupp already operates a software development center for steering technology in Budapest, where some 400 software engineers work to develop solutions for electro-mechanical steering systems for the automotive industry. In 2013 Thyssenkrupp also opened a new front and rear axle assembly plant for Audi in the Hungarian city of Gyor.