the vehicle, as well as the type of engine. When importing a vehicle, the customs office gives the car a provisional customs clearance, which is valid for 30 days. The car must be checked at the technical test station of the National Transport Authority and only cars which satisfy EU standards pass the technical test and can then be imported. When the car has been approved, it must be registered in Hungary with a Hungarian license plate and the client must pay the registration tax and return to the customs office to make the final customs clearance. To have a third-party liability coverage supplemented with an accident tax is also mandatory in Hungary. Hungary collects Value Added Tax (VAT) on all goods. VAT is 27 percent – one of the highest in Europe - on most products and services including automotive parts and components. Automotive products are required to comply with European safety regulations and technical standards. The metric system of weights and measures is standard in Hungary.
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Hungary has traditionally benefited from an attractive combination of skilled labor and low labor costs. Lately¸ however, in Hungary a lack of process-specific expertise has been reported in industries including the production of instruments and tools, foundry, new materials processing, and machining. It is getting more challenging to find experienced electronic and technical engineers, machinery and tool engineers, CNC machines and robots operators, technologists, designers, quality controllers, lacquerers, power press operators, logisticians, purchasers and maintenance people who speak at least one foreign language. Experienced managers, IT specialists, IT programmers are also in high demand. As a result, U.S. suppliers of training programs that focus on technical skills and foreign language abilities will find opportunities in Hungary.
The greenfield investment of Mercedes-Benz in Kecskemet in 2015, the enlargement of the Audi factory in Győr in 2016, the PSA (formerly Opel/GM Powertrain) factory’s engine production in Szentgotthard and Suzuki factory in Esztergom compose the “four-primary pillars” of the automotive industry’s development. The Suzuki factory has a significant role with a 12 percent market share in the Hungarian passenger cars market. The total output of the “big three” i.e. Audi, Mercedes and Suzuki was 560,000 cars in 2017 and is expected to reach 800,000 cars by 2020. In June 2018 Mercedes-Benz announced its expansion investment plans in value of EUR 1billion.
For the first three quarters of 2018, a total of 224,641 new cars were registered in the Hungarian market which shows a 28 percent increase. The most significant growth in Hungarian sales was achieved by Suzuki, Ford and Skoda. Suzuki, Ford and Skoda. The Hungarian Vehicle Importers Association (MGE) is forecasting a 4 percent growth in sales in new cars for 2019. Less expensive gasoline engines dominate the market: while in Western Europe about half of all passenger vehicles are diesel powered, in Hungary this share is only around 25 percent.
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