“We are working to win the future for Hungary,” the defence minister said at the groundbreaking ceremony of a new Rheinmetall plant near Szeged, in southern Hungary, on Tuesday.
Kristóf Szalay-Bobrovniczky said in his address that although the German company “is known as a defence investor, and the project is linked to the defence industry, it goes beyond it.”
He added that the new plant, creating 300 jobs, will produce equipment for electric and hydrogen-fuelled vehicles.
The minister also said the project would dominate Europe’s research and development sector, adding that he was proud the company had chosen Szeged for the investment.
In cooperation with Szeged University, Rheinmetall will build “an ecosystem and knowledge base offering unique opportunities for many Hungarian and foreign youths,” he said.
“Hungarians doesn’t need to go elsewhere as the world is coming here,” the minister added.
As we wrote earlier, Hungarian and Turkish defence companies are establishing a joint venture to develop the Hungarian assembly and production of Turkish Gidran armoured fighting vehicles in western Hungary, details HERE.
also read: First Leopard 2A7, Leguan 2HU tanks inaugurated at Tata base – VIDEO
A major development has been introduced at the Michelin plant in NyÃregyháza, Hungary. The sports car tire factory is modernizing its curing equipment by replacing the existing steam presses with electric ones, and thereby reducing its energy consumption.
Curing (or vulcanization) is the final stage in the tire manufacturing process, during which the tires are getting their final geometric form. The chemical reaction that creates cross-linkages between the polymer chains of the rubber compound takes place in curing presses holding the tire molds, under the influence of heat.
Michelin developed its first electric curing press in Germany in the early 2010s. This technology is considered unique as it is not typically used by other suppliers in the production of tires for passenger cars. In Germany, this first electric curing press was equipped with Siemens technology, and Michelin is implementing this control technology as company standard for all its factories for the installation of new presses.
Pilot project precedes the Hungarian development
Michelin installed the prototype of the electric curing press in NyÃregyháza in 2021, and in the following year, 6 new electric presses were commissioned in addition to the first one. Based on the positive experiences, the replacement of all 40 presses in the plant has begun in 2023, and all curing presses are scheduled to become electric by the end of 2024.
By replacing steam presses with electric production technology, the NyÃregyháza factory is expected to increase its energy efficiency by 7 times and move closer to achieving carbon neutrality by 2050 by reducing its environmental footprint and CO2 emissions.
The NyÃregyháza plant is the first Michelin tire factory to use Siemens PLCs to control not only the electric curing presses but also the robot that operates them. In addition to that, Siemens Zrt. provides spare parts for the machines and training for Michelin’s local engineers. This cooperation is not new: production at the Hungarian tire factory has been supported by Siemens drive technology solutions, frequency converters and electric motors for quite some time.
Making tires for super sports cars
The NyÃregyháza plant started its operations in 1962, and the Michelin Group acquired – as it was called at that time – the Taurus company in 1996. Today, the factory, which employs more than 1,000 people, manufactures high-performance tires for sports and super sports vehicles. Its customers include Porsche, Land Rover, the AMG Group and Ferrari. The tire factory is the largest company in Hungary’s Szabolcs-Szatmár-Bereg county, and has cooperated with more than 1,700 local suppliers in the last five years.
With a portfolio of more than 10,000 active patents worldwide, Michelin is a leader in research and development. The company’s goal is to have its tires 100 percent meet their sustainability requirements by 2050, meaning that they should be made entirely from renewable, recycled, bio-based, or otherwise sourced, sustainable materials.
A curious trend has emerged in the food industry: in many cases, Hungarian-produced food can be bought for a lower price in other European countries, like Germany. While travelling abroad, many Hungarians have likely encountered the eye-catching revelation that Hungarian products such as salami, pasta or snacks are notably more affordable compared to their prices back home.
An article by Portfolio.hu delves into the trajectory of a hypothetical meat product manufactured in Hungary priced at HUF 5,000 (EUR 12,6) in a quest to unravel the reasons for the price difference. The product which is presumed to be of superior quality and exportable enjoys demand both domestically and internationally. What does this hypothetical product tell us about the price difference?
Efficiency and wages
It is widely acknowledged in professional circles that the Hungarian food industry’s efficiency trails behind that of larger European producers which results in elevated operational costs within the country. Furthermore, the domestic food industry, which is in need of modernisation, contends with a higher interest rate when seeking investment opportunities for growth and development.
While this favours foreign corporations, it only partially explains why domestically produced goods can be cheaper abroad than at home. However, it is also evident that the less efficient Hungarian food industry struggles to mitigate economic impacts without resorting to price increases.
Competition strength also plays a role because a smaller domestic market with fewer players tends to inflate prices domestically, unlike the larger more efficient European market. Moreover, it is likely that higher domestic inflation provides room for raising prices, especially as competitors adjust accordingly and in an inflationary context, workers tend to demand higher wages. However, wage levels alone do not provide sufficient explanation for this trend.
While wages in Hungary remain lower than in most European countries, granting an advantage to domestic manufacturers, this wage gap, although narrowing in recent years, still persists significantly. This disparity grants domestic producers a competitive edge over foreign counterparts yet it fails to clarify why the same Hungarian products are cheaper in other countries.
The real reason
In conclusion, the price difference between the same product sold in Germany compared to Hungary can be largely attributed to taxes. These taxes are the value-added tax (VAT) and special retail tax which together contribute to a 23% increase in price in Hungary.
Additional factors such as differences in Extended Producer Responsibility (EPR), commercial sector uncertainty, exchange rate volatility, regulatory unpredictability, inefficiencies in the domestic industry and imperfect competition further elevate costs domestically. These factors are challenging to quantify but significantly contribute to higher prices in Hungary compared to foreign markets despite transportation costs. Consequently, it is not surprising that domestically produced products can be 25-30% cheaper in other countries.
Read also:
Hungary falls behind Austria, competes with Bulgaria to avoid last place – HERE
Hungarian forint falls at brutal pace: where will it land? – HERE
Industrial output in Hungary was an annual 13.7 percent lower in December 2023, the Central Statistical Office (KSH) said on Tuesday, reporting its first estimate.
Based on working-day adjustments, it was 8.7 percent lower year on year, as there were two fewer working days compared with the same month in 2022.
Month on Month, output fell by 0.3 percent, according to seasonally and working day-adjusted data.
Hungary Dec retail sales down 1.0 pc yr/yr
Retail sales in Hungary fell by an annual 1.0 percent in December, the Central Statistical Office (KSH) said on Tuesday. Retail sales edged down by 0.2 percent when adjusted for calendar year effects.
Adjusted food sales rose by 1.3 percent, while non-food sales dropped by 3.0 percent. Vehicle fuel sales were 3.8 percent higher. Month on month, sales were 1.4 percent higher.
In absolute terms, retail sales came to 1,811 billion forints in December. Food sales accounted for 49 percent of the total, non-food sales for 37 percent and sales at petrol stations for 14 percent. In the full year, retail sales dropped by 7.9 percent.
Szijjártó noted that Mercedes was continuously expanding its plant in Kecskemet, in central Hungary, and BMW was constructing a base in Debrecen, in the east of the country.
“As a result, Hungary has become part of an exclusive elite club with China and Germany, where all three of Germany’s premium car brands have an independent base,” Szijjártó said.
While “some Western European politicians are constantly spreading the ideology of splitting the Chinese and European economies, reality is thankfully completely different: after the big Chinese and Korean battery plants serving the German companies the world’s biggest Electric vehicle maker, China’s BYD is also bringing its first European plant to Hungary,” the minister said.
Suzuki has announced a temporary halt regarding the production of the Vitara and S-Cross models at its Esztergom plant for a week due to the recent events at the Red Sea, as stated in a company press release on Monday.
Therefore, these two models will not be produced for a week, starting from 15th January to 22nd January. This decision was made due to delays in the arrival of Japanese-made engines, Reuters wrote.
Magyar Suzuki Ltd., with a share capital of HUF 5.5 billion (EUR 14,503,447), was established in 1991, involving Suzuki of Japan, the Hungarian government, Itochu and the World Bank. The production of the popular Suzuki Swift commenced in 1992.
The Japanese car manufacturer has gained significant trust within the Hungarian market and has maintained its position as the market leader for seven consecutive years (2015-2022), currently holding the second place as of 2023.
In the latest announcement, Suzuki revealed plans to invest HUF 9.3 billion (EUR 24,524,011)Â in Hungary, allowing them to expand production capacity and establish a more sustainable, carbon-neutral Esztergom plant.
Red Sea and the Houthis
The Houthis, an Iran-backed rebel group, regard Israel as their enemy and are known for targeting ships passing through the Red Sea. Notably, they avoid attacking Russian and Chinese vessels. Although Iran denies involvement, there is clear evidence of Tehran’s support for the Houthis. Recent reports indicate that the rebels are employing Iranian drones to target not only merchant ships but also British and US military vessels.
Last week, Tesla and Volvo also announced temporary suspensions of production at their European factories.
As we wrote earlier, Hungary provides significant support for automotive promoters, details HERE.
In other news, a Chinese electric car brand is to be available in Hungary first in the region, find more information HERE.
UPDATE
Nearly two thousand workers will be directly affected by the production line shutdown, but the company stressed that this will not affect workers’ wages, according to VG.
Suzuki produces around 650 cars a day in Esztergom, so
the one-week shutdown will mean that around 4,550 vehicles will not be finished.
According to the factory, this shortfall will be made up later and in the future parts will be delivered via an alternative route.
The ships are being rerouted, and production is expected to resume on Jan 22, the company’s communications head said.
Liberty Dunaújváros, Hungary’s biggest steelmaker which is in the process of turning around its business, has restarted its rolling mills, including its hot dip galvanised line.
This is the first stage of a 100 day programme to increase operating efficiency in preparation for an expected market upturn, Liberty Steel Group, which acquired the business in October, said on Monday.
During the restructuring process, Liberty Dunaújváros is retaining its staff and paying salaries as normal. Retraining courses in the first half of the year will prepare employees to man a 150-tonne electric arc furnace on order from China’s CISDI Engineering Company, which is expected to cut carbon emissions by around 80 percent and allow for flexibility in charge materials.
As we wrote in November, Liberty Steel has submitted the winning offer in a procedure to sell the assets of troubled Hungarian peer Dunaferr which went under liquidation, details HERE.
The HUF 5.2 billion (EUR 13.6m) R and D project at its plant in Szombathely is connected with parts for hybrid and pure electric vehicles, with the state providing 1.3 billion forints in support, the ministry said in a press release. One hundred new jobs linked to engineering will be created as a result, it added.
Szijjártó said in a speech at the inauguration that the “revolutionary transformation of the automotive industry” was the “backbone of the European and global economy”.
This automotive revolution was completely rewriting the global economy, and countries would either be winners or losers in this new era, he added.
The competition, he said, had two phases. First, it was about which countries succeeded in attracting electric automotive manufacturing, and in this respect Hungary was a “European champion” and “among the best in the world”.
The world’s second largest electric battery plant will be operating in Hungary from 2025, and all three major German premium car brands manufacture here, he noted.
The second phase was about R and D, he said. Since Hungary has laid good foundations for manufacturing, and in terms of infrastructure developments and revamping its higher education, the country now has a “good chance of entering the second phase of the competition” for R and D bases, Szijjártó said.
Schaeffler’s R and D units for electric motors will be located in Szombathely, he noted, and the clutch or flywheel for every tenth car on the world’s roads was made at its plant there.
Fully 93 percent of the plant’s output is for export, he said, adding that the company maintains excellent cooperation with several Hungarian universities.
Last year, Hungary’s automotive industry set a record, with 12,000 billion forints worth of sales, while the sector grew by 16 percent in the first ten months, he said.
Hungarian industrial output in October fell by an annual 3.2 percent, while working day adjusted data show a decline of 2.8 percent, the Central Statistical Office (KSH) confirmed in a second reading on Wednesday.
While most manufacturing posted a decline, heavy vehicles and electrical equipment showed an increase, KSH added. Output of the automotive industry grew by an annual 4.9 percent in October, up from a 1.2 percent increase in the previous month, while the electrical equipment segment rose by 9.0 percent.
Output of the food, drinks and tobacco segment fell by 2.8 percent.
Based on seasonally and working day-adjusted data, industrial output was 0.6 percent lower than in September.
Economic Development Minister Márton Nagy held talks with the executives of car parts supplier Continental in his office on Monday, and he made it clear that Hungarian jobs belonged to Hungarians, his ministry said.
Nagy and Continental Automotive Hungary CEO Róbert Keszte and the company’s other leaders reviewed strategic trends in the economy, and specifically the car industry, touching on recent press reports concerning Continental, the economic development ministry said in a statement.
The minister reaffirmed the government’s commitment to protecting families and jobs, saying businesses first had to offer job openings to Hungarians before employing other nationals.
Keszte said that contrary to the media reports, Continental’s plant in Makó had yet to carry out any collective layoffs. He added, however, that the layoffs concerned the termination of temporary and fixed-term employment contracts as well as employees who are reaching retirement age.
He said Continental provided more severance pay to its employees than what is required by law. He said the company was committed to observing the legal regulations and supported the amendments tightening the law on the employment of guest workers.
Continental employs close to 8,000 people in Hungary.
As we wrote before, while many perceive Hungary as being anti-foreign, the statistics do not support this notion. It is estimated that there are already 500,000 guest workers employed in Hungary, details HERE.
Also, as we reported earlier, the minimum wage agreement was signed in Hungary, details are HERE.
The government will launch a HUF 2.9 billion (EUR 7.7m) subsidy scheme to boost the share of local suppliers to big automotive and battery industry companies in Hungary, state secretary for industrial policy Gergely Fábian said on Wednesday.
The scheme will launch as a pilot programme in 2023 and the full scale of support will be made available from 2024, Fábian said.
The programme is the product of cooperation with the Hungarian Chamber of Commerce and Industry (MKIK), he added.
The subsidies will be available to businesses with headcounts over 250.
Environmental protection rules for factories
In an effort to fulfil environmental protection targets, the energy affairs ministry will tighten emission thresholds for factories and the plans have been published for social consultation, the ministry said on Wednesday.
Coordination talks with the national Environmental Protection Council and the Hungarian Chamber of Commerce and Industry have also been initiated, the statement added.
The government expects all investors to observe environmental protection, work safety and other regulations connected to their activities and the authorities regularly check that rules are obeyed, the ministry said.
Based on the experiences of authorities and obsevations by members of the public, the ministry has reviewed the emission thresholds of factories and proposed to tighten them.
Headline industrial output fell by 7.3 percent year-on year in September, following a 5.2 percent decline in the previous month, a detailed release of data by the Central Statistical Office (KSH) on Monday shows.
Output dropped 5.8 percent when adjusted for the number of workdays, KSH said.
At the same time, output of the automotive industry, Hungary’s biggest manufacturing sector, rose by 1.2 percent year-on-year in September, slowing after a 4.6 percent increase in the previous month, KSH added.
The segment accounted for 27 percent of manufacturing output during the month.
The detailed data show output of the electrical equipment segment, which made up 12 percent of manufacturing output, inched up by 2.0 percent.
Output of the computer, electronics and optical equipment segment, accounting for 10 percent of manufacturing, fell by 18.2 percent.
Output of the food, drinks and tobacco segment, which made up 13 percent of manufacturing sector output, slipped by 9.7 percent.
In a month-on-month comparison, output rose by a seasonally- and workday-adjusted 1.2 percent.
For the period January-September, output dropped by 4.9 percent year-on-year.
Industrial sales fell by 11.2 percent year-on-year in September. Export sales slipped by 7.7 percent and domestic sales dropped by 16.4 percent.
In absolute terms, industrial sales reached 5,916 billion forints (EUR 15.6bn). Export sales accounted for 62 percent of the total.
Fidesz MEP András Gyürk on Monday called on the European Union to “abandon the course leading to the ruin of European industry”, at a plenary session of the European Parliament.
At the debate on setting up the Strategic Technologies for Europe Platform (STEP), Gyürk said STEP wouldn’t solve the crisis caused by the EU’s “failed industrial strategy and irresponsible budgetary policy”. The Fidesz delegation did not support the initiative, he said.
Industrial performance fell by 5 percent in the past year, “competitiveness is in ruins, and forecasts suggest stagnation and recession,” Gyürk said. The responsibility for the situation lies mainly with the European Commission, he said. “What we now see is the result of an industrial policy of sanctions, unrealistic green goals and increasing bureaucracy,” he said.
STEP is an attempt to continue on that failed road, he said. “A real solution of the problem requires a change in Brussels. Let us hope that happens next June the latest,” he said, referring to the European parliamentary elections.
Fidesz MEP Andor Deli said: “It is now clear that the EU’s budget is in a worrying state. To maintain its liquidity, the EU is now requiring further payments from member states, and continues to withhold Hungarians’ money to exert pressure.”
The European Commission should “return to a policy based on mutual respect to find a solution regarding the EU budget in the coming weeks,” he added.
Tesla Inc. has enjoyed an impressive run of consecutive quarterly car delivery records, but in the past three months, the company faced a hurdle to its winning streak in the form of factory downtime. The electric vehicle manufacturer temporarily closed some of its facilities during the summer to implement upgrades, a move that CEO Elon Musk had forewarned would result in a slowdown in production. Additionally, with inflation exerting pressure on household budgets, consumers have encountered greater difficulty when contemplating significant purchases.
Analysts’ Projections for Q3 Deliveries
According to analysts surveyed by Bloomberg, Tesla is expected to reveal its third-quarter delivery figures soon, with an estimated total of 456,722 cars. This projection falls slightly short of the 466,140 units delivered during the preceding quarter, marking the first decline since early 2022. In recent days, some analysts have adjusted their expectations downward.
Tesla’s Phenomenal 2023 Performance: Doubling Stock Value and Surpassing Market Benchmarks
In the year-to-date (YTD) performance of Tesla as of September, 2023, the company has displayed remarkable growth, achieving a YTD return of 155.90%. This signifies a substantial increase in Tesla’s stock value, which has more than doubled during 2023, a noteworthy achievement for a corporation of its magnitude. These impressive results make Tesla an attractive option for investors seeking reasons for investing in a promising stock.
The YTD increase for Tesla stands at $163.89, equivalent to 151.61%. Notably, Tesla’s YTD return surpasses those of major benchmarks such as the S&P, Dow, Nasdaq 100, Russell 2000, Gold, and the 10-Year Treasury.
These impressive gains signify a noteworthy recovery from the challenging year of 2022 when Tesla’s shares experienced a significant annual decline of 65%.
Several key factors underlie the resurgence in Tesla’s stock price. Firstly, it reflects renewed market confidence in the company’s ability to overcome obstacles and deliver value to its shareholders. Tesla’s strong market presence, innovative electric vehicle technology, and ambitious expansion strategies have been pivotal in restoring investor trust.
Furthermore, the surge in Tesla’s stock price has had a profound impact on the company’s market capitalization. Starting the year with a market capitalization of $342.24 billion on January 1, Tesla has seen its market cap soar to an impressive $861.12 billion as of the market close in the 2nd Quarter. This represents a remarkable increase of $518.88 billion, equivalent to a 151% surge, according to data from Macrotrends.
Tesla 2023 market cap. Source: Macrotrends
Strategies to Sustain Sales
Despite the production slowdown, Tesla, headquartered in Austin, Texas, has taken measures to sustain strong sales throughout the year. In response to inflation and high interest rates, the company has consistently reduced its prices.
For instance, the starting price of Tesla’s best-selling Model Y in the United States now stands at $50,490, down from $65,990 at the beginning of the year. Furthermore, the Inflation Reduction Act, passed approximately a year ago, has provided a significant boost. All versions of Tesla’s high-volume vehicles—the Model 3 sedan and Model Y SUV—qualify for a $7,500 federal tax credit, benefitting eligible buyers.
Tesla’s delivery figures come at a time when the spotlight is on Detroit, where the United Auto Workers union is engaged in a strike against General Motors Co., Ford Motor Co., and Stellantis NV, the manufacturer of Jeep, Chrysler, and Dodge vehicles. This strike occurs as the Detroit automakers navigate a costly transition from the era of internal combustion engines to electric vehicles.
Tesla’s delivery announcement is poised to mark a significant milestone for the United States, as it is expected to cross the threshold of 1 million electric car sales this year for the first time.
The Model 3 Refresh and Future Plans
The quarter also witnessed the long-awaited refresh of Tesla’s Model 3. The automaker undertook a substantial redesign of the front end of its entry-level sedan—the first major facelift since the Model 3 entered production six years ago.
While the refreshed version is not yet available in the United States, Tesla has provided limited information on when American buyers can expect to see it. Tesla manufactures the Model 3 at its facilities in Fremont, California, and Shanghai, and deliveries of the revamped Model 3 are anticipated to commence in the fourth quarter, with exports to European customers.
Investors and enthusiasts eagerly await Tesla’s upcoming model, the steel Cybertruck, inspired by the Blade Runner universe. Social media platforms, including Elon Musk’s X, have been inundated with images of the Cybertruck, but mass production remains a distant prospect. Musk has alluded to a debut party for the Cybertruck in Austin, Texas, where the first customer will receive the vehicle, but a specific date has yet to be clarified.
Analysts do not anticipate the Cybertruck contributing significantly to Tesla’s delivery volumes in the near term, given its complexity, and they expect production to ramp up gradually.
Future Production and Market Outlook
Meanwhile, when Tesla completes its factory upgrades, the company is poised to increase its car production significantly. Analysts project production exceeding 2 million units by 2024.
Deutsche Bank analyst Emmanuel Rosner stated, “Our base case now is for Tesla to guide to about 2.1 million deliveries next year, versus the current consensus of 2.3 million units. On the bright side, with the company not trying to push as much volume, there could potentially be less pricing pressure next year.”
Conclusion
In conclusion, Tesla’s remarkable streak of record-breaking car deliveries faced a challenge in the third quarter due to factory downtime and economic factors. While the quarter marked a potential decline in deliveries, Tesla’s strategic pricing adjustments and ongoing production enhancements suggest a strong future outlook, with analysts forecasting increased production volumes in the years to come.
The investment, which is being supported with a 4.6 billion forint government grant, will create 110 jobs. The company will produce two million rotary shafts for electric vehicles a year.
“This is another investment that clearly demonstrates that German businesses have retained confidence in Hungary and its investment environment, and is further proof that the relationship between the Hungarian government and German companies investing here is based on mutual respect,”
he said.
German businesses make up the largest investor community in Hungary, which 20 percent of foreign investments coming from Germany, Szijjártó said.
Hungary’s car manufacturing industry employs around 170,000 people directly and, indirectly, three to four times more, the minister said.
As we wrote a few days ago, LEGO is to invest EUR hundreds of millions in Hungary, details HERE.
The National Competitiveness Council has backed a compromise regarding vehicle emissions and battery life known as EURO7, the economic development ministry said on Monday.
Seven EU member states — Czechia, Slovakia, France, Italy, Romania, Poland and Bulgaria — proposed a compromise on a European Council plan to tighten EURO6 rules which would have hamstrung the car industry, the ministry said in a statement, noting that Hungary’s government opposed a large part of the planned changes looming over tens of thousands of Hungarian jobs.
The proposal for a compromise solution was aimed at preserving the competitiveness of the vehicle industry, and several regulations will remain unchanged, while a grace period for the application of new rules has been agreed on until 2026 at the earliest, it added.
“Hungary supports climate policy aims but all this must be achieved in a way that the measures underpinning them are effective and proportionate,” Gergely Fábian, the state secretary for industrial policy and technology, said in the statement.
Fábian said the government had protected the interests of Germany’s car industry in Hungary, unlike the German government which had maintained a different stance in the debate.
The compromise proposal would advance reaching emission targets and reducing emissions without jeopardising industrial and economic output, the statement said, adding that overly strict rules would also have hindered the green transition.
The Hungarian government, under the country’s space industry strategy, recently decided to send an astronaut to the International Space Station (ISS) whose 30-day mission will involve testing various equipment and conducting scientific experiments, Szijjártó noted, according to a ministry statement.
The list of tasks to be performed by the astronaut will be put together by Hungary’s space industry players and universities, the minister said.
“These tests will contribute significantly to the development of Hungary’s high value-added high tech industries, be they health science or any other developments linked to modern industries,” he said.
The Hungarian astronaut will be part of a four-member international mission, Szijjártó said.
Under the agreement to be signed with Axiom Space, the mission will be launched between October 2024 and early 2025, he said.
Exactly when the mission will take place will depend on the spaceflights scheduled by NASA and the ISS, as well as the other three international astronauts’ training schedules, Szijjártó said.
The minister noted that Hungary has narrowed its list of applicants for the space mission down to four candidates. They will begin the first phase of their training and tests in Austin and Houston next month, after which the list of candidates will be narrowed down to two, he said. Hungary’s second astronaut will be chosen directly before the mission’s launch, he added.
The minister said that Debrecen is envisioned as a second capital city. This city, which is outstanding economically, socially, civically, culturally and in sports, is unique not only in Hungary but also in Central Europe. With its infrastructure, population, educational opportunities and industry, Debrecen has established itself as a leader in Central and Eastern Europe.
János Lázár also believes it is important for Debrecen to function as a kind of second capital. The Minister of Construction and Transport recently presented the investment plans for the next five years. These include the creation of an economic zone in the triangle of Debrecen, NyÃregyháza and Miskolc. This will make Debrecen the capital of the countryside, making it the second capital of Hungary.
It would not be unprecedented
Magyar Nemzet notes that it would not be the first time in the world history that a country has had more than one centres. There are several arguments in favour of the Hajdú-Bihar county seat being the most suitable for this position.
Debrecen is home to 200,000 people, making it the second largest city in Hungary, ahead of Szeged. Debrecen’s increasingly dynamic region is strengthened by the city’s booming economy.
Thanks to investment by large companies, Mayor László Papp estimated in the spring that Debrecen’s share of the country’s industrial output could soar to 16% by 2030, up from 2.8% in 2022.
If we look at Hungarian history, Debrecen has already proven itself. In 1849, the government fighting the Austrian emperor temporarily moved its headquarters to Debrecen.
As we have mentioned before, Hungary having two centres would not be an unprecedented case. If we take only Europe, the capital, Amsterdam, is the largest and most populous city in the Netherlands. But the seat of government and justice is an hour’s drive away in Hague.
Especially in large countries, multiple centres are a well-known phenomenon. In the United States, New York is the financial centre alongside Washington. In Germany, Frankfurt is the financial centre, not the capital Berlin.
In India, the capital is New Delhi and the huge commercial centre is Mumbai. In Israel, Jerusalem is bigger than the capital Tel Aviv, in Australia Canberra dwarfs Sydney, while in Brazil the relationship between Sao Paulo and Brazil is the same.
