The situation and perspectives of Hungarian agricultural machinery manufacturing

Husti, István – Antos, Gábor – Lőrincz, László – Bak, Árpád

Keywords: Hungarian agricultural machinery manufacturing, characteristics of agricultural machinery manufacturing, innovation activity

The Hungarian agricultural machinery manufacturing industry is about 150 years old. This period included dynamic boosts as well as occasional declines. The biggest change in the recent development of the industry was brought by the change of the political system at the end of the 1980s. The bigger, mostly state owned, institutions were replaced by small and medium sized enterprises (SMEs). Today, according to the official statistics, there are 168 companies in Hungary engaged in agricultural machinery manufacturing. The industry is mostly characterised by the predominance of SMEs (85%), a high ratio of foreign ownership (56.4%), the total employment number (over 8000 employees), the export orientation (over 80% due to the export capacity of the bigger manufacturers) and the export - import balance (+100 million EUR/year).
In order to understand the future perspectives, we analysed those manufacturers – primarily based on their innovation activities – that generate more than 50% of their revenues from agricultural machinery manufacturing. We found that they spend 2% of their total revenues on R+D and 1-1.5% on marketing, even though these factors have a strong influence on their future. Seventy-one per cent of the analysed companies carried out product innovation and 66% of them performed technological innovation. In the case of product innovation the main focus is on improving quality, while technological innovation also focuses on cutting manufacturing costs. This is in line with international practice.
Our study revealed the factors that obstruct innovation (the high risk and high cost, the lack of knowledge, the low level of innovation potential, the inadequate infrastructure and the legal, regulatory and tax difficulties) as well as the factors driving innovation. From this list, the most important factor is the potential of professional exhibitions and this is being acknowledged and more and more valued by most of the Hungarian enterprises.

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