Hungarian Car Parts Industry at a Cross-Roads : Fordism versus Lean Production

This article is aimed at shedding some light on the on-going re-structuring process in the Hungarian car parts industry. The performance of this sector can be regarded as a sort of proxy variable to gauge the success of transition to market economy: Hungarian car parts suppliers have lost their former principal market with the collapse of CMEA but just then major foreign investors have entered the Hungarian market. Thus the new market opportunities are there for the Hungarian companies; it is now their task to seize this chance for re-structuring and survival. A closely related issue is the speed and extent of the diffusion of a new production paradigm, namely, lean production, and that of new products, processes, management and organisational culture and techniques, e.g. just-in-time, total quality control, as required by foreign buyers. Will an archipelago of relatively advanced suppliers emerge, with these new developments being locked into an enclave, or can these new products, processes and management techniques diffuse in a wider circle through second and third tier suppliers? More generally, can this ‘on-the-job training' accelerate the badly needed market re-orientation and transition? What is, and, should be, the role of the Hungarian government to facilitate this process?This article, based on an extensive literature survey and interviews with managers, cannot provide comprehensive answers to these questions. Yet, it is hoped that the most significant issues can be addressed despite the lack of statistical data on this sector and the limited number of interviews, and hence informed guesses can also be formed about the most likely developments in the near future