Contact: Bruce Brogan [email protected]

Ph: 248-549-4900

Date: 5/27/2003

As Hungary prepares to join the European Union in May, 2004, the country continues to attract millions of foreign investment dollars – including significant new investments from American-based companies.

That was the message conveyed by the Hungarian Investment and Trade Development Agency ("ITD Hungary") at a seminar, luncheon and news conference held at the Renaissance Club in downtown Detroit on Thursday, May 15^th. The Detroit visit was organized by the Michigan International Trade Association and was part of the ITD Hungary’s tour of five US cities that began in Boston and wrapped up in Seattle.

The Detroit program was of special importance, as it was the only stop on the five-city tour to feature Hungary’s Ambassador to the United States, Dr. András Simonyi. Ambassador Simonyi flew in to help draw attention to the significant growth in automotive manufacturing in Hungary in recent years. The appearance also marked the Ambassador’s first trip to Detroit since becoming his government’s chief emissary to Washington, D.C., last fall. He had a full schedule, giving the luncheon speech and holding a news conference following the luncheon at the Renaissance Club, then meeting with local business leaders later in the afternoon.

The Ambassador spoke to invited guests from industry during the luncheon, emphasizing the growing importance of the automotive industry to Hungary’s expanding manufacturing sector, while drawing attention to Hungary’s promotion of hi-tech and bio-medical investments as well. He used the occasion to personally thank the U.S. automotive companies that have already made investments in Hungary. Among the Detroit area companies that have investments in Hungary, Ambassador Simonyi met with representatives from Delphi Corp., General Motors, Visteon and Lear Corp., during his visit.

Opportunities for investments in the EU

The Hungarian economic team’s seminar focused on informing Michigan companies of the opportunities to do business with Hungary’s trading partners in the European Union, Central Europe and the former Soviet-bloc countries by setting up operations in Hungary. ITD Hungary opened a permanent Trade Commission Office in Chicago in 2002, to provide immediate service to the growing number of Midwest companies interested in setting up operations in Hungary.

American businesses, in particular, are being encouraged by ITD Hungary to make new investments in "hi-tech" activities in the automotive, electronic and bio-medical sectors, areas in which Hungary is quickly developing a highly visible role as the regional center for Central and Eastern Europe (CEE). ITD Hungary is spearheading efforts to publicize Hungary’s attractive package of investment incentives and its business-friendly economic environment.

During the seminar, ITD Hungary representatives explained how the implementation of intelligent free-market initiatives by Hungary’s young democratic government have led to strong economic growth, a surge in foreign direct investment, and more than 20 trade agreements with other countries, including integration into the European Union next year. Combined with its central geographic position, these qualities make Hungary a truly desirable location for investment in Europe. U.S. companies recognize Hungary’s central location to more than 600 million European consumers. But Hungary also offers a skilled and highly productive work force, low corporate tax rates and transparent investment rules. Based on the measurement of these and other economic qualities, Hungary is ranked as the sixth-best country in which to develop high-technology industries, according to the OECD (Organization for Economic Cooperation and Development), the multi-lateral economic development agency.

One of the more promising areas of Hungary’s high-technology growth is in research and development. A number of automotive companies – including GM, Delphi, Visteon and Jabil Circuit from the US – and large electronics companies such as General Electric, Nokia, Siemens, Flextronics and Ericsson, have shifted some of their innovative development centers and R&D activities to Hungary. Such investments tend to have a multiplier effect on other high-tech investments in the country.

Hungary was the first country in its region to introduce an EU-conformed investment incentive system in January of this year. "Smart Hungary" is the theme for the country’s revitalized investment promotion efforts – led by the Hungarian Investment and Trade Development Agency. The program underscores the transparency and open and fair competition that characterizes Hungary’s investment climate. Among the goals of the ITD Hungary this year is to encourage established investors to increase foreign direct investment and reinvestment, to promote Hungary as a regional research and development center and to promote development in new areas of the country.