Landing in Europe: China’s new energy vehicle industry chain chooses to land in Hungary

As more and more Chinese new energy car companies expand their market in Europe, advanced and cheap electric vehicles from China are entering Europe, and European Union President Von der Leyen has said that the European Union is ready to impose punitive tariffs on Chinese car imports. Chinese carmakers are formulating plans to solve the tariff problem by setting up factories in Europe. At present, countries including France, Germany, Italy, Spain, Poland, and Hungary are launching a charm offensive against Chinese carmakers, and Hungary is becoming the biggest beneficiary. China is helping Hungary surpass Germany to become the leading producer of electric vehicles in Europe.

OEMs: BYD, NIO

Power battery manufacturers: Ningde Times, Yiwei Lithium Energy, Xinwangda

Material companies: Huayou Cobalt, GEM, Enjie

Auto parts: double-ring drive

Power battery structural parts: Zhenyu Technology, Kodali

Lithium battery equipment companies: Pilot Intelligence, Hangke Technology, Zhicanon

With so many European countries, why did the automotive industry chain choose to establish a factory in Hungary?

First, Hungary's geographical conditions are quite advantageous, providing favorable conditions for OEMs to cover the European Union market and even the Central and Eastern European markets.

Opening the map, it is not difficult to find that Hungary is located in the heart of Europe, connecting East and West Europe. Hungary has complete infrastructure and transportation infrastructure, and the whole of Europe can be reached by land transportation. In terms of water transportation, although Hungary is a landlocked country, it can cover 16 European Union countries through the Danube and Rhine river systems. Even the capital Budapest can reach China directly through the China-Europe train on the Longhai Line. Transportation costs have considerable advantages.

Second, Hungary has a good automotive industry foundation and a sufficient workforce in the automotive industry.

Although Hungary does not have a world-class car brand, it has always been the main production site of German cars. It gathers in BBA's factories and has complete industrial supporting facilities. At the same time, the government also attaches great importance to the training of technical personnel in automobile-related industries. More than one-sixth of higher education students study related majors. For the exit, it is easier to find supporting manufacturers and recruit familiar local managers and industrial workers.

Third, Hungary has cost advantages over other European Union countries.

Hungary has strong support for the new energy vehicle industry and is one of the highest aid subsidies in the European Union. BYD can get more favorable policy support. In the long run, Hungary also has the lowest 9% corporate tax rate in the European Union and the second lowest wage level of workers in the European Union, enhancing the price competitiveness of car companies in the European Union.

Chinese people pay attention to the right time and place for doing business, and Hungary has these conditions in place. The globalization of Chinese car companies focuses on how to defuse risks.

Of course, Hungary is not the only country that has the above advantages. The Czech Republic and Slovakia, which gave birth to Skoda, also have it, and even the automobile industry is more mature. But Hungary has an advantage that these countries cannot match, that is, Hungary is one of the friendliest countries in the European Union to China, and it is the best "bridgehead" for Chinese car companies to enter the European Union.

Now Chinese automakers are facing an environment of accelerating anti-globalization and the rise of trade protection. In addition, Japan and South Korea, as the younger brothers of the United States, are naturally easier to integrate into the system dominated by Europe and the United States, and Chinese automakers face greater risks of trade protection. Some time ago, thousands of Porsches and Bentleys were detained by US customs for using Chinese parts.

Compared with other European Union countries, Hungary, which has adopted the policy of opening up to the East, is more welcoming to Chinese companies, and the policy of restricting BYD's production and sales in the future is less risky. Previously, BYD's commercial vehicle factory has been running smoothly in Hungary for a long time, as evidenced by this. If you go to another country, it may be difficult to avoid the risk of continuous delays for various reasons like Tesla's German Giga factory.

The most important thing is that Hungary is still a European Union country. For example, by localizing production in Hungary, BYD can help BYD avoid possible future European Union tariffs on Chinese car companies, cancel car purchase subsidies and other countermeasures, and better access to the European Union market.

These advantages of Hungary not only attracted BYD but also NIO's first power station was selected in Hungary. Moreover, new energy vehicle industry chain companies such as CATL, Yiwei Lithium Energy, Xinwangda, and Kolida have also settled in Hungary, allowing China's auto industry to reach an unprecedented height.

These industrial chain enterprises not only enter the system of traditional European car companies, but also help Chinese car companies that go overseas in the future to comply with the European Union's localization policy, avoid trade protection, and help Chinese cars go overseas.