Central Europe’s car market is shifting: EVs and new players reshape the industry

As electric vehicles become increasingly common, the existing vehicle fleet continues to age, while new brands entering Europe are beginning to reshape the car market.

AutoWallis, a major regional automotive group, has outlined the key trends shaping the Central and Eastern European car market in its latest report, along with what to expect in the coming years. The Hungarian-based company now operates in 17 countries, giving it a broad view of how markets across the region are evolving.

Hybrid drivetrains and the continued expansion of Chinese brands are expected to gain further ground in the years ahead, as these companies look to build a strong global presence and demonstrate technological leadership in electrification — with Europe seen as a key entry point.

In 2025, more than 13 million new passenger cars were registered across Europe, a 2.4% increase on the previous year. In the European Union, sales rose by 1.8%.

Several Central European markets outperformed this, but the figures also point to a market in transition. Electric vehicles are spreading, new manufacturers are entering, and demand in some segments is becoming less predictable. In the coming years, the question will not only be how many cars are sold, but also what types of vehicles — and to whom.

How demand is changing in the region

In Central and Eastern Europe, the market is expanding faster than in Western Europe, but its structure is different. Buyers are becoming more price-sensitive and increasingly focused on running costs, which is shaping purchasing decisions.

This shift is reflected in drivetrain preferences. Hybrids have become the most popular option, while petrol cars remain a close second. Diesel continues to lose ground, and fully electric models still account for a smaller share — although they are growing quickly.

Growth is particularly strong in plug-in hybrids and fully electric vehicles, outpacing the EU average.

In 2025, registrations of battery electric vehicles rose by 29.9% in the European Union, compared with a 53.3% increase in Central and Eastern Europe. Combined registrations of electric and plug-in hybrid models grew by 63.3% in the region — nearly double the EU’s 31.1% increase.

China and electric vehicles gain momentum

One of the most visible shifts in recent years has been the growing presence of Chinese carmakers in Europe. China has become the world’s largest car exporter, and Europe remains one of its most important markets.

Part of the explanation lies in the slower-than-expected pace of electrification among European manufacturers. High costs and technological challenges have created an opening in the market, which Chinese brands have been quick to exploit. Companies such as BYD, MG and XPENG are steadily building their presence across Europe.

We previously reported that this trend is already reaching Hungary, with new Chinese brands beginning to enter the market.

Their advantage is based on several factors:

• lower production costs
• strong battery supply chains with faster product development cycles
• competitive pricing combined with high levels of equipment.

As a result, Chinese brands accounted for around 11% of the European electric car market in 2025 — a sharp increase in just one year.

While the European Union has introduced tariffs to curb their expansion, momentum has yet to be significantly affected. Some manufacturers are already planning production facilities in Europe to bypass trade barriers and strengthen their long-term position.

Mounting pressure on Europe’s carmakers

European manufacturers are facing growing pressure from several directions.

The industry remains heavily dependent on Asian supply chains, particularly for battery materials and semiconductors, leaving production exposed to geopolitical tensions.

At the same time, carmakers in Europe face higher energy, labour and logistics costs, prompting some companies to consider relocating production. These pressures are compounded by geopolitical conflicts — including tensions in the Middle East and trade frictions between the EU and China — as well as tighter emissions rules.

Hungary: a market growing, but slow to renew

Hungary’s car market reflects both growth and structural challenges. The average age of passenger cars exceeds 15 years, one of the highest levels in the European Union, while car ownership per capita remains relatively low.

There are around 4.2 million passenger cars on Hungarian roads, making it one of the oldest vehicle fleets in the EU. At the same time, there are just 445 cars per 1,000 inhabitants — among the lowest ratios in the bloc.

This is largely due to fewer new car purchases compared with Western Europe, a high level of used car imports, and the slow removal of older vehicles from circulation.

Despite this, the market continued to grow in 2025. More than 129,000 new cars were registered, representing a 6.4% increase. While the share of electric vehicles remains below the EU average, gradual growth is also visible.

Rising prices mean many buyers continue to turn to the used car market — making it important to be aware of the most common types of fraud when purchasing a used vehicle.