Hungary: The new magnet for German car manufacturers and e-mobility!

Hungary: The new magnet for German car manufacturers and e-mobility!

In recent decades, Hungary has developed into a real star in the sky of the European automotive industry. Not long ago the country was hardly relevant as a location, but now large German manufacturers such as BMW, Mercedes and Audi are investing heavily in the Hungarian economy. Mercury reports impressive sums: BMW plans to invest around two billion euros in a new factory in Debrecen, which will produce up to 50,000 vehicles annually. Mercedes-Benz, on the other hand, has great ambitions in Kecskemét, where up to 300,000 new cars are expected to roll off the assembly line every year.

The Hungarian automotive industry is attractive not only for foreign brands, but also for international companies such as Stellantis and Suzuki. Audi has been active in Győr since the 1990s and has invested more than eleven billion euros to date. In total, an estimated 150,000 people are employed in the motor vehicle industry, which accounts for a good fifth of the country's industrial output. Hungary not only offers lower labor costs and an attractive corporate tax of just 9%, but also excellent energy costs compared to other EU countries.

The growth of e-mobility

But it's not just traditional car manufacturers who are benefiting from the development. Electromobility is also becoming more important, and this is attracting Chinese companies in particular. Germany Trade and Invest also highlights that around 90.3% of the vehicles appearing in Hungary are exported, with a large proportion going to Germany. It is a thriving business that not only creates new jobs, but also increases local value creation in areas such as battery technology and e-component development.

The Hungarian government is promoting the transition to electromobility with all kinds of tax incentives, which makes the country particularly attractive. In the period from January to August 2024, new registrations of electric vehicles increased by more than 50% compared to the previous year. Only Malta can keep up with faster growth in Europe. This is primarily due to the high acceptance rates of new technologies, which are supported by attractive framework conditions.

Challenges and opportunities

Despite the boom, there are also challenges. The charging infrastructure, especially in rural areas, continues to represent an obstacle. It is important to find solutions here, for example through mobile charging systems or the promotion of fast charging stations. E-mobile magazine explains that the Hungarian government offers tailor-made programs for companies to make the switch to electric vehicles easier. A further step into the future are BYD's plans to build a factory in the south of Hungary that will produce up to 200,000 electric cars in the future.

Overall, it can be said that Hungary is determined to further expand its role as the center of the automotive industry in Europe. The country combines favorable location conditions with political measures that attract both national and international companies. The coming years will show how successful this transition to electromobility will be and what positive effects this will have for the Hungarian economy.