Opel began engine production at a newly-built facility in Szentgotthárd, Hungary, last week, reports inautonews. The first unit to be rolled off the production line was a 1.6L four cylinder, direct injection ECOTEC turbo engine. The automaker plans to invest EUR130m (USD174m) at the new plant to increase production capacity by 100,000 units, which would be facilitated by installation of 80 new machines and an expansion of the facility by 1,600m2. This would boost output at the new engine plant to 600,000 units annually. Opel would also begin producing 1.6L diesel engine units at the plant this month.
Significance: Hungary is a strategic automotive hub for automakers in Europe, both as a low-cost production ground as well as an emerging car market. According to a Financial Times report, the auto sector in Hungary – eighth largest auto parts market in Europe – generates annual revenues of EUR12.7bn (USD17bn), accounting for 10% of gross domestic product and 20% of exports. With the new investment at the Szentgotthárd plant, Opel would have invested up to 1.4bn (USD1.87bn) in its Hungarian operations. The new capacity expansion at the Hungarian plant would double its workforce to about 1,400. The automaker plans to expand production of a variety of advanced Euro 6 engine types at the plant, including a family of small gasoline engines, medium-sized gasoline engines and medium-sized diesel engines.
