Hungary is poor in the natural resources essential for heavy industry and relies strongly on imported raw materials. Industry, only partially developed before World War II, has expanded rapidly since 1948 and provides the bulk of exports. Industrial plants were nationalized by 1949, and the socialized sector accounted for about 98.5% of gross production in 1985.
Hungary has concentrated on developing steel, machine tools, buses, diesel engines and locomotives, television sets, radios, electric light bulbs and fluorescent lamps, telecommunications equipment, refrigerators, washing machines, medical apparatus and other precision engineering equipment, pharmaceuticals, and petrochemical products. Textile and leather production has decreased in relative importance since World War II, while chemicals grew to become the leading industry in the early 1990s. Food processing, formerly the leading industry, provides a significant portion of exports; meat, poultry, grain, and wine are common export items.
In 1993, industrial production was only two-thirds of the 1985 level. In 1997, industrial output increased in the manufacture of road vehicles, consumer electronics, insulated cables, office equipment and computers, steel products, aluminum metallurgy, household chemical products and cosmetics, rubber and plastic products, and paper and pulp production. In 1992, Suzuki and Opel began producing automobiles in Hungary, the first produced there since before World War II. Suzuki increased annual output at the Magyar Suzuki Corporation from 29,000 to 50,000 units starting in the 1995 fiscal year. Since 1990, Hungary has developed industrial strength in the automotive field as well as an expanding automotive sourcing industry in plastics and electronics. In 2001, Hungary produced 144,313 automobiles, a 5% increase over 2000. In 2000, it produced 1,621 heavy trucks, a 24% increase over 1999. In 2000, close to 14% of total Hungarian industrial output was accounted for by the vehicle manufacturing industry.
The growth in manufacturing output and productivity in the early 2000s has been supported by a considerable amount of foreign investment. Successive Hungarian governments have pursued privatization policies and policies to restructure industry, so that by 2002, 80% of the economy was privately owned. High-tech equipment (computers, telecommunication equipment, and household appliances) showed the strongest industrial growth in 2001. Industries targeted for growth in 2003 were the automotive industry, the general industrial and machine tool industry, and the information technology industry. Housing construction was another growth sector in 2002