The surprising country producing your favourite new cars

11/22/2024 01:54 PM

New car manufacturing is a strange and interesting world. While the brand’s heritage can originate in one country, some models will be made in another – using parts from somewhere else entirely.

Perhaps one of the most surprising new-car production hubs for 2024 is Hungary, which is increasingly favoured by major international brands like Suzuki, Audi and Mercedes-Benz.

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It’s easy to assume that your car comes from the place the brand originated, like China, Japan, South Korea, England, Germany, France, or the United States. But the truth is that there are over 30 different countries that produce vehicles for the Australian market.

Hungary, a country that is entirely landlocked, has somehow managed to get the contract to make some of your favourite new cars. In fact, vehicle production is so crucial to Hungary’s economy that it accounts for over 20 per cent of the country’s GDP.

Which cars are made in Hungary?

Hungary has a long and rich automotive history, with Suzuki, Audi, and Mercedes-Benz all setting up shop in the country over the past three decades.

They’re not just producing low-volume or special edition vehicles there, either; most of the cars that come out of Hungarian factories are popular options in each brand’s lineup.

Suzuki Australia has long used the Hungarian plant as its choice of production location for the popular S-Cross since 2014 and the Vitara since 2015.

Audi Australia has also opted to import vehicles from the small European country, including the TT/TTS/TT RS range and Q3/RSQ3 range, as well as previous models that have moved to production plants in other countries, such as the A3/S3/RS3 range up until 2020.

Mercedes-Benz Australia is another brand currently importing vehicles from Hungary. These include the popular CLA-Class range and the new EQB electric SUV.

Hungary’s automotive industry

The first car brand to emerge from Hungary was Csonka, which was formed in the nation's capital of Budapest.

A massive feat of engineering, Csonka finished its first car in May 1905, pre-dating the world's first mass-produced car, the Ford Model T, which hit the market in 1908.

On its maiden test drive, the Csonka car managed a 2000km journey through the roads of Transylvania and Upper Hungary, averaging 26km/h, landing itself in the history books.

Founder Janos Csonka also developed a modern carburettor in 1893 using patents from Karl Benz, which helped kick-start Hungary's passenger vehicle market.

The brand never made it to the mass market. Instead, production ceased in 1912 for Janos to return to work at the Budapest Technical University.

Another early brand for Hungary was MAG which, by 1913, was building a vehicle for the Hungarian market. A total of 50 cars were made, and then, after the outbreak of the first World War, 50 postal vans were made.

After WWI, MAG focussed on the passenger vehicle market, where the brand made another 2000 cars before it decided to cease production in 1933 due to the economic crisis felt a few years prior.

A few other brands came and went between the early and mid-century, including Fejes, which built 45 cars between 1923 and 1932, and HÓDGÉP, which made a microcar called the Puli between 1986 and 1998.

At the end of World War II, Hungary was under Soviet rule as part of the Eastern Bloc. This meant the Central European country adopted a Communist political structure, which in turn saw the end of national automotive production and made it extremely difficult for international brands to set up shop in the country.

Hungary remained under this rule until the fall of the Eastern Bloc in 1989 and the national revolution of the Hungarian people. The socialist political structure ended, and Hungary gained independence, thus forming an open market.

Essentially a brand new country with an economy on its knees and high unemployment rates, the Hungarian government began searching for ways to inject money into the economy.

Suzuki and Audi were the first two brands to inject money into the local economy with help from the government, the World Bank, and other outside investors.

The past three decades have been important for the automotive industry, which employs tens of thousands of Hungarians.

Why your Audi may come from Hungary

German auto giant Audi is the most prolific car manufacturer to set up camp in Hungary.

The partnership started in 1993 when Hungary and Audi signed an agreement to help boost the country’s economy by creating jobs at a new Audi factory. By 1994, the factory was unveiled, and the company was named Audi Hungaria ZRT.

The early days of the Hungarian factory were spent building the four-cylinder engines that powered cars like the first-generation Audi A4, S4, and TT. The following years marked important milestones for the Hungarian factory, like 1998, when production began on entire Audi TTs for the international market.

Later, in 2001, Audi began commissioning the Hungary factory to build the Audi A3 and S3 models, and a year later, the factory opened a new section to build the V8 engines for the Audi range.

Over the following decades, the factory moved from producing the TT and A3-based models into larger vehicles, such as the body parts for the RS5 in 2010 and completed construction of the Q3 in 2016.

In 2015 alone, 2,022,520 engines and 160,206 complete vehicles were produced at the Hungarian factory, which means that nearly every vehicle sold internationally with an Audi badge in 2016 had an engine built at the Győr factory.

Fast-forward to 2024, and Győr is the single largest engine manufacturing plant in the world. If you own an Audi from the last 10 years, then it is likely that at least the engine, if not the entire car, has been made there.

The logistics of the operation are actually quite interesting. All cars and engines are moved out of the factory and transported via train, where they will either end up back in Germany and shipped out via one of the major ports, or complete cars will be taken to a French or Spanish port to make their way to Australia.

Why are Suzukis built in Hungary?

Perhaps a more surprising name to see in Hungary’s landlocked European country is Suzuki.

Much like Audi, Suzuki was, and still is, a big player in the early development of the country's manufacturing industry, with the government offering big incentives for the Japanese auto giant to set up shop in the country.

Magyar Suzuki Corporation started in 1991 and began producing vehicles in 1993. The plant was first made to construct the 1.0-litre and 1.3-litre Swifts for the national and continental market but later expanded to produce a wide range of small vehicles for the international market.

Suzuki’s involvement in Hungary not only played a crucial role in employing thousands of citizens but also played an important part in offering a locally made, affordable vehicle to residents who couldn’t necessarily afford the tariffs and costs of an imported car.

By 2005, the Hungarian plant had produced 849,000 vehicles for the international market, including the Swift, Wagon R, and Ignis. The plant also produced rebadged vehicles for Subaru, Fiat, and Opel for the continental market.

By the time 2006 rolled around, the plant had already manufactured an impressive one million cars as it began producing the second-generation Suzuki Swift. It reached the two million car milestone in 2011, the three million in 2017, and the four million in February 2024.

The current generation of the Suzuki Swift made its way back to Japan for production, leaving only the S-Cross and the Vitara to continue being made at the Hungarian plant.

That means that the car you suspected was Japanese-made actually came from the small European country.

Many residents of Hungary look fondly upon Suzuki's early involvement with the country's independence; since then, it has become the car brand of choice and the market leader.

Similar to the other brands, Suzuki employs rail systems and carrier trucks to export the cars to the nearest international port, where they are shipped to Australia.

Mercedes-Benz’s plan to expand in Hungary

Mercedes-Benz joined Hungary’s automotive manufacturing industry in 2012 and began playing a major role in employing local residents.

This factory has less heritage, but Mercedes-Benz has pledged to expand to yet another factory to help boost the output of vehicles out of this small country.

When the company reported its numbers in 2022, it showed that the Hungarian factory employed 4543 people and was producing over 150,000 cars per year, which generated sales of nearly €4 billion ($AUD6.5 billion).

All of the CLA-class range sold in Australia, along with the all-electric EQB range, comes from Hungary.

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