Hungary Automotive Industry and Smart Mobility
U.S. companies interested in the Hungarian automotive market are encouraged to use distribution, franchising or agency arrangements for successful market entry.
Hungary’s car industry will hit 2019 production levels in 2023. Analyst averages show a declining trend from month to month, and economic forecasts are based on a health forecast, which also includes a sense of optimism.
In 2020 three million fewer cars were sold in the European Union when compared to 2019, a decrease of 23.7%.
Innovations and changes such as the CO2 standard, as well as alternative propulsion, self-driving, industry 4.0, digitalization and automation, are all revolutionizing the industry. In an effort to protect workers and to adjust to pandemic challenges, there have been many changes in the supply chain. Looking at the macro-processes, Hungary is focusing on restarting.
A global recession is expected, with the eurozone shrinking by 7%, according to median forecasts, it is anticipated that Hungary will be unable to avoid the crisis. According to central bank forecasts, a 4.1% decline in GDP is expected, and a less optimistic forecast could lead to a decline of almost 7%.
Market Entry: Entering the Hungarian market, U.S. companies need to use distribution, franchising and/or agency arrangements to guarantee procedures are in line with the laws of Hungary (and the European Union).
Market Trends and Demand: Commodity market in the steel market is dominated by China, of which the automotive sector is one of the largest steel consumers, but the epidemic also affected steel production (further exacerbated by the US-China steel market conflict).
Aluminum production is also dominated by China, which led to an oversupply in the market even before the epidemic. As a result, market consolidation is anticipated, and demand is expected to fall by 6%.
E-mobility vehicles usage showed a 68% growth in 2019, with 672 registered electric charging stations in Hungary.
Electromobility: Although there are still some uncertainties and shortages in new regulations, overall, the new regulation follows more closely actual European and domestic market developments.
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