On Tuesday, the Chinese automotive group BYD organised a supplier forum at the headquarters of the state investment agency HIPA in Budapest.
Foreign Trade Minister Péter Szijjártó praised the cooperation between German and Chinese companies in Hungary as a prime example of economic neutrality. The three German premium manufacturers are just as present as five of the ten largest battery manufacturers from the Far East. This will make Hungary a meeting point for companies from East and West in the heart of Europe. The BMW and CATL plants are being built in Debrecen at the same time, while Mercedes-Benz in Kecskemét made it a precondition for the expansion of the site that the Chinese battery partners also settle in Hungary.
Punitive tariffs are a low blow
The EU’s punitive tariffs against China’s electric car industry will isolate the EU in terms of foreign trade and represent a blow to competitiveness. Szijjártó once again referred to the fierce resistance of the European automotive industry to the tariffs, which only ten of the 27 EU member states ultimately voted in favour of. He hoped that the EU centre would return to its senses by the end of the month in order to somehow stop this ‘economic suicide’.
The decision to phase out combustion engines in the middle of the coming decade will massively boost investment in the electric car industry, and the battle for these projects will become increasingly fierce. Hungary has single-mindedly developed its automotive industry into a flagship since 2014, with production output quadrupling to 13,700 billion forints (approx. 36 billion euros) within a single decade. Last year, more than 500,000 cars were built in Hungary; as soon as the current projects of Mercedes-Benz in Kecskemét, BMW in Debrecen and BYD in Szeged are ‘activated’, Hungary could become one of Europe’s TOP5 with up to 1 million cars per year.
‘Revolutionary’ renewal
Szijjártó sees the establishment of BYD as an opportunity for a ‘revolutionary’ renewal of the supplier industry. Even in the transition from combustion engines to electric drives, Hungary wants to remain a stronghold of the automotive industry in Europe, with the best offers for economic players. Hungary admires the exponential development of the Chinese economy and wants to participate in it. China’s foreign investment in Hungary has now reached 20 billion euros, making it the second largest source of FDI alongside Germany.
Addressing the representatives of BYD, the minister asked them to give local companies fair opportunities: ‘So that “made in Szeged” can be complemented by “made by Hungarians”.’
As HIPA Director István Joó informed, 112 companies that are already proven suppliers to leading European car manufacturers are presenting themselves. BYD announced the construction of a car plant in Szeged in 2023, where up to 300,000 cars per year are to be manufactured in future.
