Business 23 July 2025, 9:29am

Government Commissioner refutes reports of delay in launch of BYD factory in Szeged

Portfolio

BYD, which is building its first European car factory in Szeged, is sticking to its plans for Hungary and has not changed its plans for the realisation of the project and the ramp-up of production, István Joó, government commissioner and CEO of the HIPA National Investment Agency, said in a statement sent to MTI on Tuesday. Reacting to press reports on his social media page, Joó called it “fake news” that BYD is postponing the launch of the Szeged plant and will ramp up production at the Turkish plant instead of the Hungarian one.

According to István Joó, BYD's headquarters confirmed on Tuesday that

the works in Szeged are still in full swing.

As Portfolio reported, citing Reuters sources, China's BYD plans to start mass production at its electric car plant in Szeged only in 2026, and the plant will operate below planned capacity for the first two years.

The €4 billion factory in Szeged will start mass production in 2026, but in the first year it will produce only a few tens of thousands of vehicles, a fraction of the initial capacity of 150,000 units.

The final capacity of the factory would be 300,000 cars per year.

BYD said it will start operations in Szeged in October, but did not publicly say when series production will start. According to Reuters' sources, production will increase in 2027, but will still be below planned capacity.

Although production in Hungary is reportedly delayed, BYD's plant in Türkiye is starting production earlier than planned. The $1 billion Manisa plant, which was originally scheduled to start production in late 2026 with an annual capacity of 150,000 cars,

will produce more vehicles than the Hungarian plant as early as next year,

the news agency reported. According to sources, production in Türkiye will far exceed 150,000 cars in 2027, and output will increase significantly again in 2028.

In a statement, the government commissioner responsible for investment promotion and the implementation of priority large-scale investments in Hungary, who refuted the above-mentioned reports, recalled that the Chinese company decided to build its first European car plant in Hungary in December 2023, after 224 rounds of negotiations. Construction on the 300-hectare site in Szeged started in 2024. The investment will create thousands of high value-added jobs, and BYD's presence will also benefit local suppliers.

According to István Joó, BYD's commitment to Hungary is also demonstrated by the relocation of its European business centre from the Netherlands to Budapest - which will provide career opportunities for at least 2,000 highly skilled people in the capital, from marketing specialists to HR specialists and data analysts - and the launch of two large-scale research and development programmes worth a combined total of around €250 million in cooperation with Hungarian universities.

In HIPA's statement, it was recently announced that BYD will produce electric buses and electric trucks at its Komárom plant, which has been operating since 2017, bringing not only a new product range and advanced technology, but also 620 new jobs to the city.

Automotive industry expert comments on the news of delay

BYD's decision to slow down production ramp-up in non-Chinese factories appears logical given the significant overcapacity built in the Chinese automotive industry for their global market offensive,

explained Gábor Várkonyi, automotive industry expert, to Infostart.

The preference for Turkish production suggests that Chinese manufacturers find the European market more challenging than anticipated. Várkonyi noted that in Western European markets, where brand reputation, reliability, and heritage are crucial factors, Chinese manufacturers cannot compete on price alone. However, he emphasised that Chinese manufacturers have achieved significant market share more rapidly in emerging markets, gaining substantial presence within four to five years.

A significant challenge for Chinese automakers lies in their domestic market, where overproduction has led to deflationary pricing. Chinese consumers are delaying purchases in anticipation of further price reductions. "While this is detrimental to consumption, and many Chinese manufacturers won't survive this period, BYD stands out as the strongest Chinese manufacturer by all metrics", Várkonyi stated.

The expert revealed that Hungarian car plants typically operate with annual capacities between 150,000 and 300,000 units, which was also BYD's initial target range.

These plans might still materialise, just with a delayed timeline. This represents a significant volume for an economy of Hungary's size,

he added, while noting that Reuters' information hasn't been officially confirmed.

The slower production ramp-up could impact Hungary's GDP growth, as the combined operations of BMW in Debrecen and BYD in Szeged were expected to contribute several percentage points to GDP growth. This economic impact will now be delayed in line with the revised production timeline, if news of the delay prove to be true.