Conference Hungary: Historic changes in the automotive industry

Author / Editor: Zsolt Meszaros / Lina Klass

Currently, it is not the electric automobiles that are expensive, but rather the production of batteries. This was one of the conclusions drawn at the Budapest automotive conference titled “Shifting Gears in the Automotive Industry”.

At the Budapest automotive conference participants discussed the latest trends and developments of the industry.
At the Budapest automotive conference participants discussed the latest trends and developments of the industry.
(Source: Kod Media)

The economy of Hungary is highly dependent on the production of vehicles. The sector has a very important role in the fields of export, GDP (gross domestic product), added value, and employment. Vehicle production accounts for over 40% of the manufacturing industry. Among the so-called Visegrad Group (Poland, Czech Republic, Slovakia and Hungary), Hungary ranks highest in productivity per capita in vehicle production.

One of the topics of the conference was the Zalaegerszeg vehicle test track constructed near Austria that will be the first test track in Europe which is designed specifically with the aim of testing autonomous and electric vehicles. According to experts, this is a unique opportunity for an increasing number of research and development activities to be moving to Hungary. László Vigh, the ministerial commissioner of the test track reported that the foundation stone of this HUF 40 billion investment constructed over an area of 250 hectares was laid down in May, and the facility will already be commissioned next year.

Regarding the domestic proliferation of electric vehicles, participants have learned that while in 2015, there were 300 purely electric vehicles in Hungary, there are currently 1200 to 1300 of them on the roads. According to estimates, their number could increase to 20 thousand by 2020.

Electric drive for short term deliveries

Fright companies have been using electric forklifts for a long time and the use of e-vehicles for short term deliveries also might be considered. However, experts are doubtful when it comes to heavy freight vehicles whether the share of electric drives will increase to over 5 to 10 percent during the next 10 years. They predict that this sector will continue to be dominated by fuel cells in the near future.

A company for electric vehicles mentioned some more advantages of their cars, reporting that they would meet short term delivery deadlines and could travel 60 to 120 kilometres per day. Moreover, based on a payload of 1 metric ton, the vehicles offer lower costs compared to internal combustion vehicles, and their maintenance costs are also much lower. It is not the electric automobiles that are expensive, but rather the production of batteries.


Will driving be banned in the future?

Barna Hanula, the dean of the Audi Hungary Vehicle Engineering Faculty at the Széchenyi István University talked about the impact of information technology in transportation. He stressed that significant results can be achieved in the field of energy even by using non-energy related solutions. For example, autonomous vehicles may render traffic lights obsolete, eliminate the congestions generated, as well as the related environmental pollution due to the fact that they communicate with each other and reach these intersections without even having to stop. He highlighted decreased travel times and consumption, the ability to share, as well as safety as the advantages of autonomous automobiles.

On the other side, legal considerations, technological maturity, and the danger of hacker attacks may hinder the progress of autonomous vehicles. However, Barna Hanula believes that these latter factors will not prevent the proliferation of this technology. Speaking of the future, he said: “It’s quite possible that over time, driving will be banned, as it is neither safe nor effective”.

Ownership is still a key consideration

During the discussion of trends in the Hungarian automotive market, György Frank, brand director of DasWeltAuto, the trademark of Volkswagen AG for used cars, commented that car sharing (pooling) is still quite unknown to the people of Hungary, and ownership is still quite an important consideration for many. The purchasing of used cars broke records in 2017, with close to 700 ownership changes until the end of the year. If we add the fact that close to 100 thousand new automobiles were commissioned, this means that approximately 800 thousand cars changed owners in Hungary. In other words: close to one out of ten people bought a new car in 2017. He added that he was hopeful that the flow of poor condition automobiles from West Europe into the country would slowly taper off. 25 thousand vehicles are imported each year that are banned from running during smog alerts.

Labor shortage in the automotive industry

Regarding the labor shortage afflicting the automotive industry, we have learned that although the number of people employed by Hungarian automobile producers and their suppliers has doubled during seven years, the proportion of vacant jobs is still high in this sector. On a national economy level, one quarter of domestic companies is struggling with recruitment difficulties. This proportion is much higher in the automotive industry, and amounts to 59 percent.


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