Ongoing projects in Hungary's vehicle sector will push annual output above 1mn cars and 2mn engines, and Hungary will have the world's second-largest EV battery production capacity, Foreign Minister Peter Szijjarto said at the 11th Automotive Industry Conference hosted by state investment agency HIPA on May 13.

The conference was attended by executives of major carmakers.

With over HUF13.7 trillion (€34.7bn) in automotive output last year, Hungary is well positioned to become a regional heavyweight, the minister claimed.

Since the foundation of HIPA in 2014, it supported 244 major investments, which generated HUF6.1 trillion in investment volume.

Szijjarto went on to list local manufacturing capacities in the sector. BMW will begin production in September, manufacturing its fully electric Neue Klasse models exclusively in Hungary at its plant in Debrecen. Mercedes has linked the capacities of its factories, with Kecskemet soon becoming the largest Mercedes plant in the world outside China.

Audi, Hungary's largest exporter, is operating at full capacity with robust export performance, and Stellantis has ramped up engine orders by 130,000 units compared to last year and Suzuki is undergoing major upgrades under the state-supported "100 factory programme."

Hungary has also attracted BYD's first European factory and five of the world's ten largest battery manufacturers, including CATL, which will launch production before the end of the year.

Szijjarto spared no criticism toward the European policymakers, blasting Brussels for "politicised" policymaking,  from introducing tariffs on Chinese car imports to decoupling from Chinese manufacturers.

"An isolated European car industry cannot succeed; it is a dead end."

Szijjártó repeated the government's same old narratives on the war and sanctions, accusing Europe of prolonging the war and getting rid of cheap energy by cutting off Russian energy sources. "Instead of supporting peace efforts, Europe chose to sabotage them. It lost cheap energy, alienated global players like China, and locked itself into a bloc-based logic that it cannot win," he added.

"European leaders seem to compete over who can be more offensive towards Washington and more hostile towards China," according to the minister.

Hungary has become a "meeting point" for companies from East and West and an example for the success of the automotive industry, he said, highlighting local manufacturing partnerships between German and Chinese companies. He assured industry players that the Hungarian government continues to view them as strategic allies and will offer all support available.

Hungary's auto sector remains on solid footing thanks to its expanding car manufacturing and battery ecosystem despite global headwinds, HIPA CEO Istvan Joo said in his speech.

The agency overhauled its investment subsidy scheme, shifting its incentive priorities to investments with higher added value to put Hungary "on the global innovation map" of car manufacturing and prioritising less developed southern regions.

In related news, state secretary of the Foreign Minister in an interview flagged a major vehicle investment project in the country's southern region. Levente Magyar revealed that talks are ongoing with multiple Chinese carmakers and the government is planning to seal a deal before the 2026 elections.

The project would be carried out in Pecs, near the Serbian border, on a 600-hectare industrial zone. The South Transdanubia and Southern Great Plain regions have missed out on the industrial boom of the last 10-15 years and it is time the government addressed this problem by providing more subsidies to investors to invest there, he added. Magyar did not specify the companies involved in the negotiations, nor the potential size of the investment.

Weeks before Chinese President Xi Jinping's visit to Hungary in May 2024 there was speculation that the meeting could serve as an opportunity to announce a major investment in the same southern region of the country. At that time, speculation was circulating in the financial press about the construction of a new factory by Chinese Great Wall Motor (GWM) around Pecs.