Budapest

Győr in western Hungary is already home to VW’s largest engine plant. In June, production launch of the new A3 will give further drive to the location’s importance. A visit to a revitalised industrial city.

The trip from downtown Győr out to the Audi plant resembles a journey through Hungary’s industrial past. Locals call the area a “factory graveyard.” Long-abandoned factories, where chimneys smoked back in the days of socialism, now crumble behind stone walls. High voltage power lines and railroad tracks cut across the road that leads out into the future of the industrial centre in western Hungary.

Four glistening Audi rings welcome the visitor to the Győr Audi plant, which has evolved into the largest engine plant of the entire VW group. 8,600 workers are officially employed here, unofficial numbers are slightly higher. Production of whole cars will be launched in June; Audi has invested a billion euro to make this happen.

When operations were kicked off in western Hungary almost twenty years ago, hardly anybody had expected this development. The opening was attended by Ferdinand Piëch, VW’s CEO at the time, and Lower Saxony’s premier, Gerhard Schröder. The small cylinder head production plant was no more than an intergroup supplier back then. Today, if a production standstill were to occur at Győr, this would put the brakes on most assembly lines of VW’s plant network. Its current output is 8,000 engines per day – from small 4-cylinder engines to powerful 12-cylinder engines. The engines from Győr are delivered to the large factories across the VW empire – from Ingolstadt (Germany) to Changchun (China). Meanwhile, Audi Hungaria has actually become the country’s largest exporter to China. “The job of our local site is to produce top quality for the world market at competitive costs,” says managing director Thomas Faustmann.

Faustmann, who has headed the site for 10 years, was part of most of its development stages. “We have cooperated with the city, the region and the government on infrastructure issues for more than 20 years.” Highway access to the site was agreed and co financed within only a few months. What is more, industrial firms in Hungary can count on government assistance, usually five to ten percent of the total investment. “At overseas sites, public funding is conceivable at quite different levels, but we are very satisfied for European standards,” says Faustmann.

The Audi TT and some A3 models have been assembled at Győr since 1998. The output of 89 cars per day is still rather low on an annual comparison. The painted car bodies for the Roadster continue to be delivered from Ingolstadt, but not for much longer.

Győr does not want to be a “cheap production site”

The new assembly plant next to the engine plant will not only be bigger, it will also be equipped with its own paint shop. Managing Director Faustmann vividly remembers the moment in 2010 when he got the go-ahead for the next stage of the plant. Later Prime Minister Viktor Orbán and Audi’s CEO Rupert Stadler publicly announced the extension of the works at Győr at parliament in Budapest.


Although most halls have already been erected, there still are many construction workers on the site. At peak times, 1,000 construction workers were busy at the new automobile assembly plant where 100,000 new Audi A3 are scheduled to roll off the line annually. Faustmann dismisses the accusation of shifting production to cheap locations, arguing that Hungary is not a low-wage country, and that there are other places where labour costs are substantially lower. Audi hired 1,500 new workers to jump-start the new factory. Audi cannot complain about a lack of applicants; last year alone it received 42,000 applications.

It was during the crisis that the company gained people’s trust, according to Faustmann: Even as demand for engines plummeted by 35 percent in 2009, it was able to retain its workforce. “Those who work for Audi Hungaria have a safe, crisis-proof job,” he says. Word gets around about it, especially in a country where the unemployed receive government benefits only for three months.

In the area of staff training, Audi has also built the necessary structures over the years to ensure that German quality is achieved in Hungary. Audi was the first German automobile manufacturer to establish the essential elements of the German dual system combining practical training and theoretical studies. Young job starters have been enrolled in 13 qualified job-training programs in the plant’s own project workshop for one and a half years. “Without Audi, Hungarian workers would in extreme cases undergo three-year training at a vocational school without any on-the-job experience.” However, Audi does not conclude any contracts until training has been completed; no direct contracts are awarded to trainees.

“That’s unique across VW“

What is more, Audi has established three professorships at Széchenyi István University in Győr, with the aim of incorporating state-of-the-art automobile technology in the academic curriculum at an early stage. “This way, we make sure that we can quickly put our graduates to good use after they leave university,” says Faustmann. Among others, experts from Germany are invited to hold lectures in the German-language Master’s programmes. “That’s unique in Hungary and unique across VW.”

There is another German premium automobile manufacturer that has been competing for top professionals in Hungary in the past three years. In 2012, Daimler opened a large production plant at Kecskemét in the southern part of the country. However, the companies do not aim to engage in salary competition. “We actually partner with Daimler here in Hungary in some fields, in the interest of developing Hungary as an industrial location,” says Faustmann.

However, the partnership is most likely to end at Hungary’s borders: in the race for the pole position in the compact class, the Hungarian sites of the German premium manufacturers play the decisive role. Once production of the new A3 has been launched in June, the Wolfsburg headquarters will keep a close eye on Hungary. “If Audi and its affiliated brands continue to grow, we will be able to further expand our activities at Győr,” says Faustmann. Audis from Győr have to generate good market response, especially in the growing American market. This is where Audi’s competitors, BMW and Daimler, are currently in a faster lane. Audi sets out on its overtaking manoeuvre at Győr.