German industrial group Robert Bosch announced a HUF14bn (€43.6mn) investment at its automotive industry factory in the northeastern part of Hungary on January 11. Robert Bosch Energy and Body Systems will add production lines for next-generation products as well as testing systems by 2021.

Bosch, which celebrates the 120th anniversary of its first Hungarian unit last year, is the biggest foreign employer in Hungary with 15,000 employees, operating nine units in the country. Last year it realised HUF244bn in turnover.

The German industrial group was among the first to sign a strategic partnership with the government in 2013. These agreements cover some non-binding commitments by companies to invest and expand in the country.

Hungary has attracted foreign investors by offering lucrative grants, cash and other incentives Hungary overhauled its investment policy guidelines last year to attract high-added value projects. The incentive tools range from cash and training subsidies, tax incentives and low-interest loans with special attention to technology-intensive investments.

Last year marked a record for foreign investments. State-owned investment agency HIPA has signed 98 major investment deals worth HUF1.3 trillion. The government has supported these projects with HUF135bn in cash funding, Foreign Affairs and Trade Minister Peter Szijjarto said at the ceremony.

The government provided a HUF2.6bn subsidy to Robert Bosch Energy and Body Systems, established in 2003. The company manufactures ESP systems used in hybrid and electric cars, modern braking systems and batteries for electric bikes amongst other components for the vehicle industry

Germany is Hungary’s most important economic partner as it accounts for 27% of exports and 29% of all foreign direct investments.

The investment will further strengthen Robert Bosch Energy and Body Systems' strategic importance, said business director Frank-Stephan Kupfer.

At the time of the announcement, the 200 millionth product was manufactured at the Miskolc plant, an iBooster electromechanical brake booster, which makes the motors of hybrid and electric vehicles more efficient.