Hungary govt approves subsidies for Audi, Opel

* Audi to get 11.2 bln forints, GM’s Opel 5.5 bln

* Car plants to lift exports, boost Hungarian GDP

BUDAPEST, April 6 (Reuters) – Hungary’s government has
approved 11.2 billion forints ($61 million) of direct subsidies
for German car maker Audi’s (NSUG.DE: Quote, Profile, Research) expansion and another 5.5
billion for GM’s (GM.N: Quote, Profile, Research) Opel, the economy minister said.

The two car makers announced expansion plans at their plants
in the western Hungarian towns of Gyor and Szentgotthard worth a
combined 1.4 billion euros last year, giving a boost in coming
years to the central European country’s export-driven economy.

Economy Minister Gyorgy Matolcsy told a news conference on
Wednesday that the two projects would create 2,634 new jobs
directly and a total of 17,500 when taken together with new
workplaces created at domestic suppliers.

“These investments will produce nearly 100 percent for
exports, which also means that Hungary takes a step forward in
regional automotive competition,” Matolcsy said.

After GM’s plans to boost production, Audi said last year
it would lift output to 125,000 vehicles a year once its
expanded plant at Gyor, in northwest Hungary, begins full
operations from 2013. [ID:nLDE68M1N8]

Matolcsy said the government expected the subsidy to Audi to
pay off within three years from the start of higher production,
by the end of 2015, while the GM subsidy would return within
five years.

Daimler AG’s (DAIGn.DE: Quote, Profile, Research) new 800 million euro Mercedes plant
in the central town of Kecskemet is also expected to start
production in 2012.

Matolcsy said these three projects combined would add 2
percentage points to the contribution of the car sector to
Hungarian GDP, lifting it to around 5 percent of economic output
from 3.1 percent.

That will also boost the contribution of car exports to
16-18 percent of all Hungarian exports in the years ahead,
Matolcsy said.

(Reporting by Gergely Szakacs; Editing by Erica Billingham)

Hungary govt approves subsidies for Audi, Opel