BBJ: How would you assess the state of German-Hungarian economic relations?

Barbara Zollmann: Overall, the economic relations between the two countries are stable and of vital importance to the entire Hungarian economy. Despite a notable decrease in Hungarian exports to Germany last year, there has been stabilization in the first half of 2025, with these exports currently accounting for 25% of the total. Regarding new investments, automaker BMW is opening a completely new production site in Debrecen this month, and Mercedes is about to double its production capabilities at its existing site in Kecskemét, both of which are expected to stimulate the Hungarian industrial sector and boost exports further.

However, given the strong interconnection of Hungary’s economy, it is important to note the high degree of dependence on business developments in Germany. Currently, the subdued performance of the German economy is affecting Hungary’s growth potential. It is evident that companies in both countries are facing numerous challenges, and a swift return to strong and stable growth is unlikely. International trade conflicts generate higher costs and uncertainties, significant industries are having to cope with fundamental technological transformations, and, finally, political and geopolitical uncertainties are holding back consumption and investment intentions. In this business environment, it is even more crucial to cooperate with reliable partners and to unlock untapped business potential and growth opportunities.

BBJ: What is the role of DUIHK in the bilateral economic relationship?

BZ: Our chamber is part of German foreign trade promotion and the global German chamber network, whose primary task is to facilitate business connections between German and foreign enterprises, in our case, Hungarian companies. With a membership of approximately 900 companies spanning a wide range of industries, DUIHK is the largest bilateral foreign chamber and business association in Hungary. We advise companies on export or import opportunities, help them find business partners or set up a subsidiary here. For enterprises already present in Hungary, our main membership base, we offer a wide range of support services, new business opportunities, training programs, and multiple platforms for exchanging knowledge and best practices. Last but certainly not least, we represent the interests of German companies in Hungary towards the Hungarian government to ensure a reliable and investment-friendly environment.

Just two weeks ago, we held our annual strategy workshop with the board and the executive staff of the chamber, where we reviewed the current challenges facing investors and defined our focus areas for the medium term. To this end, we examine the factors necessary to strengthen German investment in Hungary. Our core ambition is to provide services and programs that help member companies leverage the chamber’s huge economic power into tangible benefits for their businesses.

BBJ: Recently, the Hungarian media have covered extensive Asian investments, rather than those from Germany or other European countries. Is German investor interest in Hungary dwindling?

BZ: Chinese, Korean and Japanese companies have indeed notably increased their investment activities in recent years, and with exciting greenfield investments. However, even if combined, the share of these three nations in FDI, value added, or employment is still significantly smaller than the base of German investments. German companies today employ 235,000 Hungarians, and they generate about 11% of the value added in the entire corporate sector. Over the past decade, they have invested EUR 3 billion-4 billion in Hungary every year. This means that many of the major German names are already present in Hungary, and they continue to expand their footprint here. Newcomer companies entering Hungary are often new suppliers or businesses in emerging industries. The interest of German investors in Hungary is ongoing.

Historically, German investors have regarded Hungary as a strategic hub of their global business operations, rather than as a quick-win location. They have established deep-rooted networks within their local communities, provide attractive career opportunities and invest tremendously in the training of their employees. This can be experienced every year when we bestow the “Reliable Employer Certificate” on our member companies who qualify for this honor. Additionally, German investors have established a strong local supplier network in Hungary, helping their partners to develop and grow alongside them. All of the above-mentioned factors must be taken into account when evaluating the impact of investments in Hungary on the country’s GDP and society. In this sense, Germany’s role as the leading investor in Hungary will remain unmatched for a long time.

BBJ: Looking from the other perspective, how important is Hungary for the German economy, and which industrial sectors are of special importance?

BZ: Hungary ranks 13th among Germany’s trade partners; however, it should be noted that Germany is the world’s third-largest trading nation. Hungary’s share in German foreign trade is higher than that of Sweden, Japan or India. However, the real economic significance is considerably higher than the share in trade. Hungary plays a pivotal role in the global value chains of numerous large German corporations. In other words, today, Hungary is much more than an extended workbench of the German industry, 

It is widely known that the automotive industry is a leading contributor to Germany’s economic activity in Hungary. Based on the capital invested, Hungary is the fifth-largest target country globally for the German car industry. Furthermore, Germany has a strong presence in many other significant sectors in Hungary. These include the machinery sector, the manufacturing of electrical and electronic goods, retail trade and telecommunications.

BBJ: Where do you see further potential for bilateral cooperation in the future?

BZ: An important tendency in all these sectors is that German companies are increasingly shifting their investments to high added-value activities, such as R&D or business services centers, with many of these new projects serving regional or global group members or customers. Bosch’s largest European R&D center outside of Germany is at its Budapest campus, and business software giant SAP runs one of only a few global software labs in Hungary.

In the medium-term, the energy sector offers potential for increased cooperation regarding energy efficiency (where DUIHK itself provides a range of training programs), or with respect to smart grids and storage solutions. There are also promising opportunities in the logistics and defense industries. From the perspective of our member companies, there is also a strong interest in strengthening the vocational training system and in the cooperation between businesses and universities. Finally, supporting Hungarian SMEs and further integrating them into international supply chains is an endeavor that benefits both countries.

This article was first published in the Budapest Business Journal print issue of October 3, 2025.