Hungarian politicians say they are witnessing net immigration back to the Eastern European country after a period in which citizens previously emigrated for improved work opportunities.
All Visegrad countries, namely Hungary, Slovakia, Czech Republic and Poland, have experienced outflows of population in one form or another, but Budapest has put in place a range of measures to attract manufacturers and improve wages.
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“We have seen an interesting phenomenon in that people from Eastern Europe are coming back to Hungary,” said Hungarian Minister for Innovation and Technology, Laszlo Palkovics at the recent Central & Eastern European Automotive Forum organised by Adam Smith Conferences in Budapest.
“Many [more] people came from Germany than left for Germany – also highly educated people [such as] young engineers and scientists because the environment seems to be more beneficial for them. The Hungarian economy during the last few years has grown very highly by 5.1% [and] one of the reasons is the high-tech environment.
“Hungary as an investment location is pretty attractive. Companies which intend to leave the UK after Brexit see Hungary as attractive. Manufacturing plays an active role in Hungary. If I consider the last 80 years of Hungary, this [automotive] is a success story. The share of the automotive industry in Hungary was 4.5% in 2018. Volume has doubled since 2010 – this is quite remarkable.”
The Innovation and Technology Minister added despite Hungary’s small size, the country was positioning itself as a technology centre, especially for battery production as demand for zero emission vehicles and sustainable transport solutions increases. “Hungary rather soon will be the number one battery producer in Europe – batteries are a top priority,” said Palkovics.
Hungary continues to be a substantial draw for suppliers and OEMs, despite significant wage increases in recent years, with the economy performing well even against a slowdown in automotive sales.
“Fifteen out of the top 20 Tier 1 suppliers are active in Hungary,” noted Palkovics. “Many automotive companies decided to come to Hungary, either to expand their activities or to build new plants.
“We need to generate the technological environment [for example], 4.0, which is very important and the 5G strategy [as well as] AI.
“Changes in the automotive industry [such as] zero emissions, sustainability of transportation, production of renewable fuels; we have [a] very interesting challenge in how do we handle the car in the future. The younger generation does not want to own a car any more.”
