In recent years, Hungary has become one of the most important hubs for the automotive industry on the continent. Although the future of an increasing number of plants in Western Europe remains uncertain, the government led by Viktor Orbán has succeeded in attracting numerous major investments from the automotive sector to Hungary, reported Világgazdaság.
While more and more vehicles are being manufactured in Hungary and the industry’s revenue is expected to rise due to recent investments, Volkswagen has announced plant closures in Germany, while Mercedes-Benz is beginning production of one of its most anticipated electric models in Kecskemét due to the favorable conditions there.
It is no wonder that the Austrian press is actively following the latest developments in the Hungarian automotive industry, as suppliers from the neighboring country are an integral part of the value chain. Therefore, a potential decline in domestic performance could also have a negative impact on Austria’s export figures.
The reason for the upswing in the Hungarian automotive industry is easy to see. Viktor Orbán, the long-serving prime minister who has since been voted out of office, lured international automotive groups to Hungary with huge sums of money,
wrote a journalist from News.at, who also pointed out that this is accompanied by business-friendly conditions, such as a corporate tax rate of 9 percent and low labor costs. While an hour of work in Hungary cost an average of EUR 15.2 in 2025, companies in Germany paid 45 EUR per hour worked. These attractive conditions are also reflected in the forecasts: according to these projections, Hungary could produce 541,000 vehicles annually by 2028, and the industry’s revenue in 2025 exceeded 14 billion EUR. A key figure is that our country has surpassed Italy in the number of passenger cars produced.
Photo: MTI/Czeglédi Zsolt
Recently, BMW has invested nearly 2 billion euros in the expansion of its plant in Debrecen (eastern Hungary), where the popular iX3 model is also manufactured. The plant has an annual production capacity of 150,000 vehicles. Mercedes-Benz has made a massive investment in its plant in Kecskemét (central Hungary), expanding its area from 200 hectares to 440 hectares and making it the company’s largest automotive plant in Europe. The total cost of the expansion project amounted to 1 billion euros. The Volkswagen Group has been producing engines in Győr (northwestern Hungary) since 1993, where approximately 1.6 million engines are currently manufactured annually. This makes the plant the Group’s largest powertrain facility. The company produces 180,000 Audi vehicles annually in Hungary; in addition, the electric motors for models based on the Premium Platform Electric (PPE) are manufactured here.
In recent years, the governments led by Viktor Orbán have attracted numerous investments in the field of electric mobility to Hungary. For example, BYD, which is building a plant in Szeged (southern Hungary), has joined the German automakers already based there. Although the Chinese company has been building electric buses at its plant in Komárom (northwestern Hungary) since 2017, its first European plant for passenger cars will be built in the Southern Great Plain. In addition to automobile production, battery manufacturing is almost equally important. CATL, the world’s leading manufacturer, as well as EVE Energy, a supplier to BMW, are building plants in Debrecen and the surrounding area. Among South Korean battery manufacturers, the SK Group produces in Komárom and Samsung in Göd (central Hungary).
Electric mobility will play an important role in the Hungarian automotive industry,
said Philipp Schramel, the representative of the Austrian Chamber of Commerce in Budapest, who emphasized that most Hungarian automotive plants are already prepared for the production of electric vehicles.
However, the TISZA government’s policies appear to be fundamentally changing the situation for battery factories, which could also have implications for players in the Hungarian automotive industry. Zsolt Tárkányi, Parliamentary State Secretary at the Ministry of Transportation and Investment, had previously emphasized that the government did not support the further expansion of the CATL plant in Debrecen and had promised stricter controls in the areas of environmental protection and labor law, as well as more severe sanctions.
CATL Debrecen. Photo: Facebook/Joó István
Regulatory proceedings were initiated against CATL for improper wastewater disposal, while Semcorp’s operations were suspended due to violations of environmental and fire safety regulations. Péter Magyar also promised higher fees for polluting companies and spoke about phasing out tax breaks for multinational corporations. Another key point is that, during the election campaign, the prime minister promised a minimum wage of one million forints (2,775 EUR) by 2030. The signs therefore suggest that the conditions that currently make Hungary attractive to businesses could soon change fundamentally. Government incentives could disappear from the system, and low wages could also rise dramatically if Péter Magyar fulfills his promise. Battery factories could find themselves in a difficult situation due to stricter regulations, which could also have a negative impact on automotive companies focused on electric mobility.
Hungary is not only one of the last bastions of the European automotive industry but also represents an important sales market for numerous Austrian suppliers. In 2024, the industry exported components worth 925 million euros to Hungarian automotive plants. These included approximately 100,000 electric motors manufactured in Austria, as well as steel components for body construction.
The automotive industry is the second-most important sector for Austrian exports,
Philipp Schramel emphasized.
Our country is not only important as a sales market. According to Roland Prettner, chairman of Magna Steyr and head of the Automotive Industry Association of the Austrian Chamber of Commerce, there is an opportunity here to manufacture components whose production is not economically viable in Austria. A positive side effect of such collaborations is technology transfer, and joint research and development projects have also been launched recently.
The Hungarian government is specifically promoting developments in the field of self-driving vehicles,
Roland Prettner referred to the test track for autonomous vehicles operated by the Styrian company AVL List, which the company maintains in collaboration with Hungarian government agencies.
According to Philipp Schramel, the future development of the Hungarian automotive industry depends to a large extent on domestic political developments, but Péter Magyar’s intentions remain unclear. It follows that not only the future of the battery plants but also the entire Hungarian automotive production depends on the decisions of the head of government.
Via Világgazdaság; Featured photo: MTI/Czeglédi Zsolt
The post Auto Industry Questions Its Future Under PM Magyar appeared first on Hungary Today.
Auto Industry Questions Its Future Under PM Magyar 2026
IUSTITIA.BG – Investigations 2009-2026 2026-08-26 13:40:17
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