Hungarian Investment Promotion Agency

Two sunken car bodies in the pond at the front of the Messe building and green activists holding a sign saying “Autoindustrie versenkt Klimaschutz” (Automotive sinks climate protection) were awaiting the first visitors of IAA Mobility 2023 in Munich. A truly unusual scene. Their protest targeted the German car industry that they believe still makes way too heavy and big vehicles. Yet, the greens could have had every reason to be cheerful.

For one, the concept of the event was now expanded well beyond cars. “IAA Mobility is not about a single means of transport; it is rather about connecting the mobility ecosystem and demonstrating solutions that put people first” –  Hildegard Müller, President of VDA (Association of the German Automotive Industry) explained. On the other hand, electromobility, the ultimate driver of transition advocated by eco movements, totally dominated the gathering.

The latter is hardly an accident given the rise of EV-related FDI projects globally of which total announced value amounted to USD 93.7 billion in 2022 – nearly three times the volume in 2019.

Value proposition on display

Understandably, Germany accounted for the most of the 600-plus exhibitors, but China came second, and the share of foreign participants grew by 17% compared to the previous edition in 2021. Among the participants were a number of HIPA partners as well. For instance, major suppliers like Kirchhoff or Schäffler and OEMs such as Audi, BMW, and Mercedes-Benz were present. The latter three German premium car makers all have or will have a production site in Hungary that is the only such country on top of China outside Germany. Leading battery manufacturers CATL, Sunwoda and EVE Power that have announced projects recently in Hungary also built spectacular booths.

HIPA was represented by an attractive booth that gave a snapshot of the value proposition of the Agency. Visitors had the chance to drive a real car that is on the proving ground in Zalaegerszeg right from a simulator. On the other hand, a mixed reality intersection let you walk on an actual crosswalk, and thanks to the VR headset, you could experience first-hand how a virtual car reacts once you step on that crosswalk.

Another VR application allowed you to view scanned iconic objects of the Hungarian Museum of Science, Technology and Transport in 3D. Among others, the first tram made in Budapest in 1887 was scanned from a miniature model, and was now ready to be viewed up close, and you could also take a look into a vintage car without actually opening the door. An amazing e-replica of the legendary Alfa Romeo Tipo-158 that was built by brilliant Hungarian engineers was an additional eye-catcher.

HIPA CEO Mr. István Joó said.

How to be the winners of transformation

Not only tech was on display, a week-long conference featured over 500 renowned speakers that shared key insights of trends and best practices. Minister of Foreign Affairs and Trade Mr. Péter Szijjártó was among them, and he talked about how Hungary strives to become the winner of transformation by offering a meeting point for Eastern and Western investors.

he added. 

One of the most anticipated panel discussions was about the state of play of the European battery industry that is currently lagging behind its Asian rivals. As Colin Mackey, MD of Rio Tinto, one of the biggest mining companies in the world, noted, importing and recycling more and mining more transparently are the three critical factors European members of the EV value chain must observe at all times. A transparent supply chain is also needed to make sustainability happen.

Mackey said. (For a detailed summary of the discussion click here.)

Canada had a strong presence at IAA Mobility as the country prides itself on being the only country in the Western hemisphere with an end-to-end supply chain for electric vehicles. They mobilize a wide range of resources to lure as many EV market players as possible, and as was pointed out in an expert session hosted by Invest in Canada, a general can-do approach and a collaborative attitude between different levels of government all help.

Not to mention that investors have the full package – from raw materials to clean energy and skilled labor. Recent multibillion dollar mega projects by Volkswagen, Stellantis or Umicore perfectly showcase the huge interest investors have for the country. Therefore, Canada’s example can provide a roadmap to those that wish to prevail in the EV game.

Hungary in the spotlight

Hungarian FDI-related announcements also took place at IAA Mobility. LG Magna ePowertrain, the joint venture between LG Electronics and Magna unveiled that it would build its first European production facility in Miskolc, Hungary, by investing 51.6 million euros to make e-motors, inverters and on-boarding chargers. LG CEO Mr William Cho and Magna Powertrain President Mr. Diba Ilunga both praised the deal. (Find out more details about the deal here).

The other announcement of Hungarian relevance was made by BMW that presented Neue Klasse at the Messe, a car that will be made at the company’s fully digitized iFactory in Debrecen, Hungary, from 2025 on.

Board Member for Development Frank Weber said.

Car makers in general were super busy at the event – press conferences were scheduled one after another for a full day. And the audience was grateful: they flocked in doves to the Messe site and checked out the latest wonders of the industry in Munich downtown as well. This time around on top of the usual Bier, Bratwurst, Schnitzel und Bretzel, the Bavarian automotive capital spoiled mobility fans to the core, indeed.