Automotive in CEE Regional Conference 2024: Navigating the Future of the Industry


Roundtable on the market in Hungary and CEE, from left: Moderator Petr Knap (EY); Tibor Együd (Mazda); Richard László (Toyota); Norber Nagy (Kia); Andrew John Prest (AutWallis); and Tamás Wachtler (Porsche Hungaria).

The Automotive Business in CEE Regional Conference 2024, held in Budapest, provided attendees with a comprehensive overview of the current trends and challenges facing this vital industry across Central and Eastern Europe.

The conference highlighted the increasing presence of Chinese car manufacturers in the region, the electrification of the automotive sector, and the evolving sales models, all of which have significant implications for the Hungarian market and beyond.

Zsolt Müllner, Chairman of the Board of AutoWallis Group, opened the conference with a presentation on the automotive market’s challenges and prospects in Hungary and the CEE region. He noted that many industry trends are progressing more slowly than anticipated, with significant changes occurring behind the scenes, particularly in infrastructure.

“The emergence of competing powertrain technologies is a critical trend. However, the adoption of electric vehicles is slower than expected, with less than 40% of new car sales in our region involving electrification,” Müllner said. He attributed this to the underdeveloped charging infrastructure in Eastern Europe despite recent government measures supporting electrification.

Müllner also emphasized the growing influence of Chinese automakers in Europe, noting frequent announcements of new market entries or factories.

“The competition will intensify, affecting EV prices. Major markets will protect their manufacturers, as seen with significant tariffs on Chinese vehicles in the U.S.,” he warned. Müllner added that an omnichannel sales approach, combining online and showroom experiences, is becoming essential, with the direct sales model shifting the dealer’s role to a commission-based system.

Diversify and Expand

Gábor Ormosy, CEO of AutoWallis Group, highlighted the company’s strategic focus on diversification and expansion.

“Our revenue from foreign markets consistently constitutes 60% of our total, with significant growth opportunities through acquiring new brands and expanding our market coverage,” he said.

Petr Knap, a senior advisor at EY Consulting, discussed the rapid changes in the industry, including the rise of new manufacturers and the increasing footprint of Chinese automakers.

“Sustainable value creation requires strong, cooperative partnerships and a customer-centric approach,” he asserted.

The first panel discussion explored the restructuring of the import and dealership systems. Tibor Együd, managing director of Mazda Motor Hungary, pointed out that consumer demands drive market dynamics, necessitating a multichannel sales model and expanded financing options.

Richard László, country director of Toyota Central Europe – Hungary, highlighted the shift in corporate fleet demands towards sustainability, which influences the market significantly. Andrew John Prest, international business development vice president at AutoWallis Group, noted a generational shift in driving habits.

“Young people are obtaining their licenses later, typically in their mid-20s, reflecting broader changes in consumer behavior,” he said.

The conference also delved into the impact of digital transformation on the automotive industry. Zmak Kreso, vice president of product development at omnichannel market platform Infobip, highlighted the importance of data-driven marketing and the rise of communication via mobile apps.

“AI-driven customer service, including chatbots, and the use of messaging apps like Messenger, Viber, and WhatsApp, are revolutionizing how we engage with customers,” he noted.

Péter Antal, retail division director at AutoWallis Group, discussed the implications of the agent-based sales model versus traditional dealership models.

“The choice between [retail] models largely depends on the manufacturer, with German premium brands leading the way towards the agent model,” he argued.

ESG Significance

The significance of environmental, social, and governance (ESG) considerations in fleet management was another key topic. Péter Farkas, managing director of Nelson Flotta, emphasized the importance of sustainability in customer services and aligning European ESG standards with global practices.

Deputy State Secretary for Economic Development Bence Gerlaki of the Ministry of National Economy provided a global perspective on electric mobility trends. He highlighted the fluctuating market conditions, noting a drop in EV sales at the beginning of 2024, which later stabilized.

“China is leading in EV sales, while Germany anticipates a 14% drop due to the end of subsidies,” he said. Gerlaki stressed the importance of competitive electric vehicle production in Hungary and outlined governmental support programs to enhance EV competitiveness, including subsidies for new and used EVs, private and public investment in charging infrastructure and standardizing battery conditions and market values.

Zoltán Vígh, CEO of Jedlik Ányos Cluster, discussed the integration of energy and mobility sectors and the need for extensive network development to support charging infrastructure. He highlighted the demand for fast chargers on public networks and the need for a comprehensive development plan involving multiple industries.

The conference concluded with discussions on sustainable urban mobility. Orsolya Hartyányi, managing director of Wolt Hungary, emphasized the goal of reducing delivery times while addressing sustainability by increasing bicycle deliveries. Gergely Kofrán, head of mobility Strategy at Budapest Transport Center, stressed the importance of multifunctional public spaces and efficient organization of mobility services to cater to growing demands.

Péter Ujváry, managing director of Avis Hungary, envisioned a platform that plans and recommends transportation modes based on personal preferences. He noted that carsharing and rental services complement each other, addressing different needs.

This article was first published in the Budapest Business Journal print issue of June 14, 2024.

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