Hungary's auto manufacturing industry has continued expanding in the year since Hungary joined the European Union, but car sales have been confounded by changing tax rules.
Suzuki, Hungary's major automaker, is increasing production capacity in Esztergom to 221,000 units a year by 2006 from 111,000 last year.
The Japanese carmaker invested E237 million in Hungary in 2004 and plans to invest an additional E197 million this year. Suzuki started production of the second-generation Swift small car in Hungary in February and plans to start assembly of the Aerio small SUV for itself and Fiat next year.
The No. 2 Hungarian automaker is Audi in Gyor, which is emphasizing the engine-making side of the plant. Besides the plant record 1.48 million engines it made in 2004, Audi also assembled 23,589 Audi TT coupe and roadster models, down from 32,337 units in 2004.
Suppliers are following Suzuki's growth in Hungary.
Japanese supplier Asahi Glass decided last year to build a E60 million glass factory in Tatabanya, not far from a Denso factory in western Hungary.
Ibiden, a Japan-based maker of substrates for diesel particulate filters, will set up its second European production site 20km south of Budapest. Plans call for the 5 billion yen (E37 million) factory to produce up to 1.2 million filters a year.
US partsmaker BorgWarner expanded its turbocharger factory in Oroszlany, said Agnes Henter, deputy director of the Hungarian Investment and Trade Development Agency.