Hankook To Invest In Factory Expansion
News: South Korean tyre manufacturer Hankook Tire and the Hungarian government have jointly announced a EUR313mn (US$406.70mn) investment to add another manufacturing unit at Hankook's production site in the country. The move will create more than 950 new jobs and will increase the company's production capacity in Europe to 17mn tyres annually. The construction of the manufacturing unit is slated to start in June, with production likely to begin in mid-2014. The new facility is expected to reach full capacity in 2015.
BMI View: BMI expects suppliers to remain committed to their investments in Hungary. Much of the supplier investment in the country has been led by large-scale manufacturing investments by original equipment manufacturers in the region, and expansion into emerging markets is a way for these suppliers to diversify away from domestic markets that have less growth potential. Despite a sharp fall in orders to suppliers, owing to the overall caution about the pace of recovery in Europe's auto industry, BMI believes there is still some room for optimism in Hungary's supplier segment.