Audi Hungaria Motor Kft. in the local economy

Abstract

The role of foreign direct investment can be an important success factor for a region. In the overall constitution of a region’s territorial capital, private, non-speculative capital and the networks of ownership associated with it are objectively quantifiable material goods that contribute to the measurability of a region’s value. In the case of Győr, entrepreneurialism is strongly affected by foreign capital. This has visible and institutionalized results for this town and in its surroundings. The spatial aspects of these results are described and future development trajectories are sketched in this paper.

The high rate of foreign direct investment has an important impact. One such effect is the generation of intensive demand for a specialized workforce in the given region. There are several additional points worth analyzing. The paper describes the cooperation between Győr and Audi Hungaria Motor Kft. Further, it highlights the chief characteristics of the hosting region and those of the company, and how these characteristics impact on other stakeholders in the local economy.

The paper divides into five main sections. The first section deals with Audi Hungaria Motor Kft. The company’s economic significance is analyzed, relevant developments in recent years are described, and the company’s long-term plans for the town are sketched. In the second section, the paper briefly analyzes demographic data, especially information concerning the labour market in Győr and its surroundings. It also outlines Audi’s expansion process. The principal conclusion of this discussion is that Audi needs an increasingly large, specialized workforce in a region where the share of active population is not significantly higher than in other Hungarian counties.

The third section offers a detailed picture of the company’s logistical systems and subcontracting network. Audi manages logistics processes through a set of well-defined rules and routines. These are to be followed by every employee. Subcontracting is carefully regulated as well. Quality requirements imposed on suppliers are high. Transportation methods and related infrastructure aim to maximize efficiency in an environmentally responsible fashion. The study also offers a description of the process by which inventory was decreased from 2006 to 2008 at Audi. This process was successfully managed using requirements and measures such as activitybased costing.

In the fourth section, the paper discusses the local government’s role in economic development by means of industrial infrastructure and taxation. Until 2013, Audi enjoyed a special tax status. This did not mean, however, that the company was paying less tax. Audi also supports public institutions. The last section describes the company’s corporate social responsibility activities highlighting the positive effects of Audi’s presence. Without being overly optimistic, the study also recognizes critical issues and uncertainties regarding long-term regional development. These points are summarized at the end of the five main sections of the paper.