Chinese electric car manufacturer BYD first Hungarian Suppliers' Forum in Budapest attracted more than hundred domestic companies. At the two-day event, organised by HIPA Hungarian Investment Promotion Agency, Minister of Foreign Affairs and Trade Péter Szijjártó stressed that BYD's appearance marks a new chapter in the history of the automotive industry in Hungary, as Chinese partners will now produce not only batteries but also electric cars in the country.
Experts from the world’s leading electric and plug-in hybrid car manufacturer held meetings with key players in the Hungarian supplier market at the headquartes of HIPA.
The forum aimed to encourage cooperation between BYD and the Hungarian automotive sector, featured mostly Hungarian-owned companies that have years of experience in cooperating with global corporation. BYD’s team of over forty professionals was led by James Zhuang, Global Procurement Director, and Bu Guiyun, Director of the Service Procurement Center.
Economic neutrality in practice
In his opening remarks, Péter Szijjártó emphasised that diplomacy and foreign trade have been integrated since 2014, and the production value of the Hungarian automotive industry has quadrupled during these ten years.
As a result of the continuous efforts in the past decade, Hungary has in 2018 become one of the top 20 car-exporters that account for 90% of world car exports, and more than half a million cars were produced in the country’s factories last year, the minister added.
He said that with BMW's investment in Debrecen, Mercedes' in Kecskemét and BYD's in Szeged, "we will be in the one million range" within a few years, something that only five countries in Europe are currently capable of.
The minister also pointed out that Hungary has achieved a unique position for itself, as it hosts production bases from the three leading German premium brands—BMW, Mercedes, and Audi—and five of the ten leading Eastern battery manufacturers, including the largest. Thus, Hungary has become a meeting point for significant Western and Eastern players in the automotive industry, which is under a "revolutionarily renewal” through the electric transition, he added.
This is the essence of economic neutrality; this strategy is "not an abstract philosophy or an ideology, but practical reality," meaning that German and Chinese companies can operate together peacefully in Hungary, Péter Szijjártó elaborated.
The minister commented on the planned increase of tariffs on imported electric cars from China, stating that European car manufacturers are "vehemently fighting" against this "punitive tariff," which represents a "deep blow" to the industry.
Péter Szijjártó expressed hope that in the time remaining until the implementation of this measure at the end of October, common sense will return to the minds of Brussels decision-makers, so that this „economic suicide can somehow still be prevented”.
The minister added that the arrival of BYD marks a new chapter in the history of the automotive industry in Hungary, as Chinese partners will not only manufacture batteries but also electric cars in the country.
He underlined that for the Hungarian automotive supply chain, which has been strengthened by traditional drive technologies, the investment in Szeged creates better opportunities than ever to transition into the era of electric propulsion.
„Our goal cannot be more modest than to be one of the strongest bastions of European car manufacturing in this new automotive era, to become one of the regional manufacturing centers, the European testing hub, and to represent the most competitive European offer within the ecosystem organized around electromobility” - the minister pointed out.
He explained that for BYD and other manufacturers there are at least three good reasons in favour for Hungarian suppliers. Firstly, it is possible to keep transport costs as low as possible, thus reducing the carbon footprint of purchases. Secondly, a local supplier network provides security and resilience, creating a competitive edge, the importance of which is illustrated by the global supply chains that were disrupted during the coronavirus pandemic. Last but not least, the fact that the domestic players in the sector are "experienced partners of large international companies" is also of outmost importance.
Hungarian expertise in BYD’s cars
Companies participating at the forum can partner with the Chinese manufacturer in a range of areas from intelligent driving software to seat belts and braking systems. They were given the opportunity to give a personal presentation on how they can join BYD's value chain.
"I have no doubt that supply and demand will meet at this forum," said István Joó, Government Commissioner for the Implementation of Large Foreign Direct Investments, the CEO of HIPA.
He said that the priority is to ensure that the domestic automotive ecosystem "benefits as much as possible from the arrival of BYD".
HIPA and the entire government are working to ensure that "BYD's cars are not only cars made in Hungary, but also Hungarian cars, made with the skills and labour of Hungarian people, with the expertise, products and services of Hungarian suppliers", István Joó pointed out.
At the forum organised in cooperation with industry associations MAJOSZ and MAGE, James Zhuang highlighted that BYD had launched its products in 77 countries around the world by May this year, which is a remarkable achievement given that the decision to enter the global market was taken just a few years ago, in May 2021.
The director added that the increasingly rapid pace of the company’s development is well illustrated by the fact that while it took them 13 years to reach the one million sales mark, they increased sales from one to two million in just one year, and the third million BYD cars was handed over to its owner merely six months later.
Meanwhile BYD sold more than seven million pieces of its product, having been the first to cross this threshold among all market participants, he added.
The Szeged plant will produce 300,000 cars annually, targeting the European Union market, and production is scheduled to start as early as 2025. At the same time, the investment goes beyond itself, with goals including significantly stimulating the local economy and promoting technological and innovation cooperation between China, Hungary, and Europe, James Zhuang stated.
Hungarian suppliers must adapt
Béla Hetzmann, Chairman and CEO of Rába Járműipari Holding Nyrt. and owner and managing director of CSABAcast Könnyűfémöntöde Kft., emphasized that the process of becoming a partner is not easy anywhere in the automotive industry. The world's automotive markets will soon be dominated by electric or partially electric drives, which is a great challenge, and, alongside electrification, the importance of software in vehicle usage is also increasing day by day, he added.
Hungarian suppliers must adapt and shift their activities and product portfolios in accordance with the directions set by the changes in the industry. However, the local players in the sector are confident that BYD, as a leader in all these processes, will provide numerous opportunities for collaboration, Béla Hetzmann said.