BUDAPEST – A significant shift is underway in Hungary’s automotive production scene as car manufacturing plants from Chinese automaker BYD and Germany’s BMW are set to launch their operations by the latter half of 2025. This development is expected to provide much-needed momentum to the Hungarian economy, which has recently experienced setbacks, including falling back to technical recession.
According to Gergely Gulyás, the chief of staff for Prime Minister Viktor Orban, the optimism surrounding economic policies for the next year is buoyantly supported by the initiation of production at the new facilities. Speaking at a recent briefing, Gulyás affirmed, “The new plants of BYD and BMW are going to start production next year, during the second half of 2025.”
This expansion is emblematic of Hungary's growing significance as both a trade and investment hub for China, diverging from the path taken by several other European Union countries, which are reevaluing their dependencies on the Asian economic giant. Hungary has had strong ties with Germany, its dominant trading partner, which is already home to numerous existing car manufacturing sites.
Under Orban’s administration, there has been concerted effort to attract Chinese investments, particularly focusing on electric vehicle (EV) and battery manufacturing. Among these investments is the Chinese battery manufacturer CATL, which is establishing a remarkable €7.3 billion battery plant situated in Debrecen, located to the east of Hungary.
BYD made headlines last year by declaring its ambitious plans to set up its first European factory within Hungary, choosing Szeged, situated to the south of the country, as its base. Meanwhile, BMW has earmarked Debrecen as the site for its upcoming production facility, intending to bolster the burgeoning demand for electric vehicles.
Despite these forward strides, Hungary's economic outlook includes ominous shadows. The country recorded a contraction of 0.7% quarterly, pushing it back to what is termed as technical recession during the third quarter of this year. This economic slowdown has sparked concerns for Orban, especially as he gears up for the approaching national elections scheduled for 2026, where he is poised to face unprecedented challenges from rising opposition parties.
The Hungarian government maintains hopes for renewal, projecting economic growth of approximately 3.4% for the year 2025, sparked by the anticipated launch of the new automotive plants. Local politicians view these developments as pivotal, not only for the automotive sector but for the wider economic revival needed during these challenging times.
Overall, the new initiatives by BYD and BMW signify more than just production lines; they epitomize Hungary's strategic positioning within Europe’s automotive future. These plans can potentially alleviate the economic strains the country is suffering through, providing jobs and increased investment, interim steps toward recovery, and modernization. If successful, they could solidify Hungary’s reputation as the go-to hub for automotive innovations within Central Europe, especially with the increasing shift toward electric vehicles.
The automotive industry is undeniably set for transformative changes as these plants come alive, heralding a new era not only for Hungary's economy but for its technological progress and global standing as well. Time will tell if the ambitious expectations of the government and excited citizens alike will manifest as production ramps up and the nation moves forward.
