Clayton & Shuttleworth of Lincoln, England exported many steam engines and threshing machines to Hungary in the 19th century, and eventually set up a branch of the company in the country itself to handle sales and service. However, the changing political situation in Europe in the early 20th century led to Clayton & shuttleworth withdrawing from Hungary, and their branch was taken over by the Vienna-based agricultural engineers Hofherr & Schrantz. A new company was formed, known as Hofherr, Schrantz, Clayton & Shuttleworth (H.S.C.S.) and based in Kispest, to continue steam engine production in Hungary. H.S.C.S. soon turned their attention to gasoline-powered vehicles, and their first prototype agricultural tractor was buit in 1923. This simple design was used in their first production tractor in 1924, although the singe-cylinder horizontal petrol engine was replaced with a semi-diesel (hot-bulb) power unit that would burn a variety of low-grade fuels. Subsequent tractors also featured a semi-diesel engine, and in 1930 an H.S.C.S. tractor participated in the World Tractor Trials in England. Two decades later the company was nationalised by the Communist regime, and the plant was renamed the "Red Star Tractor Factory". H.S.C.S. often used a dual horsepower rating for their tractors, which refers to the continuous/maximum output at the belt pulley rather than the drawbar/belt horsepower.

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