BYD Chooses Hungary for European Car Production
Chinese company BYD (Build Your Dreams) has announced plans to support its European expansion by establishing a factory in Hungary. The facility in Szeged, South Hungary, will focus on producing electric and plug-in hybrid models for the European market.
BYD, the world's largest manufacturer of electrified cars (EVs and plug-in hybrids), is determined to strengthen its position in the European market, where it currently lags behind major competitors, particularly Tesla. To address this challenge, BYD is focusing on local production in Hungary, a strategy to better serve the European market.
With an ambitious goal to produce 200,000 cars annually, BYD aims for a 5% market share in Europe in the medium term and even 10% in Germany. Currently, BYD represents only 0.1% of the German market, despite selling 3,438 cars in the first eleven months of 2023 according to KBA data.
The choice of Hungary as a production location is not surprising, considering the country's attractiveness to automotive manufacturers. BYD joins other major names like Audi, Mercedes, BMW, and Suzuki, which have already established themselves in Hungary.
A significant advantage of Hungary as a production site within the European Union is that BYD can operate without being subject to anti-Chinese auto measures, as is the case in some other EU countries. Additionally, BYD's experience with the Komarom factory in Hungary, where the company focused on electric buses, likely contributed to this decision.
Although BYD has not yet announced which specific models will be produced in Europe, there is speculation that the BYD Dolphin, an attractively priced compact sedan, might potentially outperform the flagship model, the BYD Atto 3.
The European Commission recently expressed concern about the emergence of Chinese cars in Europe due to potential unfair competition resulting from artificially low prices attributed to Chinese subsidies. By producing in Europe, BYD perhaps hopes to avoid such controversies.
Despite earlier speculations about potential production facilities in France, Germany, or Spain, BYD has ultimately chosen Hungary. The factory in Szeged, located near the borders with Serbia and Romania, will become BYD's first European passenger car factory, alongside the existing production of buses and trucks in northern Hungary. BYD plans to build the factory in several phases and expects to create thousands of jobs with this initiative.
