Giant Bicycles has announced the investment of €15 million in a new 22-hectare production facility in Hungary, due to open next year.
Located in the city of Gyöngyös, about 80km from Budapest in northern Hungary, the first phase investment gives the business further agility in as both the technological and tariff pictures change.
“With the ever-changing global landscape, having a production facility located close to the market, which can be quick to respond to market demands, is an inevitable trend in the modern business world,”said Ms. Tu. “Hungary’s ideal geographical location within central Europe and its well-established transportation system will enable Giant to distribute our products to Eastern Europe as well as to mainland Europe. This is one of the key factors in choosing Hungary as the base for our second production facility in Europe”.
Tax and logistics costs are cited as a driver of the decision with the albeit large volume bike maker acknowledging that price competition remains in sharp focus as routes to market sharpen.
This long-term investment is planned to be carried out in three phases with the first phase bringing in an estimated capital spending of around 15 Million Euro and an estimated total investment of about 48 Million EUR after the three phases are completed. Construction of the first phase of this production facility is expected to be completed for production beginning in the second half of 2019. Initial production capacity is planned to be around 300,000 units and will focus on core European bicycle and E-bike models.
“With this new Greenfield investment Giant is not only becoming the number one bicycle manufacturer and exporter in Hungary, but a significant player in the region of Gyöngyös,“ said Mr. Robert Esik, President of HIPA (Hungarian Investment Promotion Agency) elaborated. “Giant’s presence also gives the opportunity to build a strong supplier chain with the involvement of local suppliers thus contributing to the strengthening of the national bicycle industry. I believe that Giant will mean much more to Hungary than the presence of a manufacturing company as through its enhanced sales and services network is shall also promote the cycling culture and enhance the popularity of the cycling sports as well.”
The city of Gyöngyös is located in northern Hungary. It has access to various road network such as the M3 motorway, European route E71 and E3.