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Top Tier Consultants in the NEWS


Index 2024. June 26.

BUSINESS CLASS - EUROPEAN COMMISSION IMPOSES PUNITIVE TARIFF ON CHINESE ELECTRIC CARS - TAMÁS RÓZSA MANAGING DIRECTOR OF TOP TIER CONSULTANTS

 

Reporter:

Good morning, Tamás. Thank you for coming to the studio. Today, we'll discuss the European Union's recently proposed regulation. This is not yet a final decision, if I understand correctly, regarding the imposition of additional tariffs on various Chinese electric car brands. In the US, the tariff is as high as 100%, which is quite punitive. Here in Europe, we are talking about tariffs in the range of 10-30%.


Reporter:

Some companies even face tariffs as high as 38%.


Reporter:

So, what can we expect from all this? It's quite unusual that different tariffs are being determined for different companies. Let's dive into this. What exactly is happening?


Rózsa Tamás – Managing Director, Top Tier Consultants:

Yes, it's undoubtedly unusual. These tariff rates are significant increases over the current 10%, which will substantially raise the prices of Chinese cars. The European Union justifies this by citing anti-trust laws, arguing that Chinese companies are engaging in unfair competition and gaining an undue advantage.


Reporter:

But what is this unfair competition exactly?


Rózsa Tamás – Managing Director, Top Tier Consultants:

That's the big question: is there really unfair competition, and what does it entail? Technological advantages, such as earlier development and superior battery and production technologies, are not inherently unfair. Higher production volumes and efficiency are also not unfair advantages. European car manufacturers need greater scale efficiency and better technology, which they are already working on. The issue may lie more in the environmental regulations. Certain intermediate materials like anodes, cathodes, and graphite, essential in car manufacturing, are produced in China under less stringent environmental regulations. This can create a cost advantage for Chinese producers, as they don't have to comply with the same emissions and pollution controls that are mandatory in Europe.


Reporter:

It seems logical to me, albeit from a consumer perspective, that if some parts of the world manufacture in environmentally harmful ways, the entire product should be banned from entering our market.


Rózsa Tamás – Managing Director, Top Tier Consultants:

That’s a conceivable idea. While I am not entirely familiar with all the regulations, imposing tariffs on these cars makes it harder to import them into Europe, affecting their competitiveness. But this raises the question of who benefits from this, and what the broader impact will be. Major European car manufacturers, like those in Germany, aren't necessarily lagging behind technologically. They might not benefit much, as their costs are still higher compared to Chinese manufacturers. Moreover, China is a primary market for these German automakers. Any retaliatory tariffs from China on high-displacement combustion engine cars, for instance, could cause significant economic harm to these companies.


Reporter:

There has been some talk of Chinese retaliation affecting French cognac, but...


Rózsa Tamás – Managing Director, Top Tier Consultants:

There are various ideas circulating. However, Chinese car manufacturers and parts suppliers are clearly looking to retaliate in the automotive sector, targeting German manufacturers. They believe that if Europe imposes such measures, the backlash should primarily impact German automakers.


Reporter:

Which seems logical, as this impacts European interests directly. There's a perception that Europe passively allowed China to dominate the solar panel market, and now there's a push to prevent a similar scenario in the automotive sector. Environmentalists, however, are concerned about how this will affect the transition to electric vehicles in Europe.


Rózsa Tamás – Managing Director, Top Tier Consultants:

Indeed, this is a valid concern. The high cost of electric vehicles in Europe is already a barrier to their widespread adoption. Chinese imports could help by offering cheaper alternatives, which could foster greater market penetration. If these tariffs are implemented, it could raise the prices of electric cars, further hindering their adoption.


Reporter:

Negotiations with Chinese authorities are ongoing, but if no agreement is reached, these protective tariffs will take effect on July 4th. It doesn’t seem likely there will be an agreement within a week, does it?


Rózsa Tamás – Managing Director, Top Tier Consultants:

It seems unlikely given the short timeframe.


Reporter:

How does this impact us, particularly with companies like BYD building in Szeged?


Rózsa Tamás – Managing Director, Top Tier Consultants:

Local manufacturing should mitigate some impacts. The tariffs target cars manufactured in China, not necessarily Chinese brands. For instance, in the US, tariffs affect Tesla cars made in China but not those made domestically. Similarly, BYD’s investments in local production facilities should safeguard them from some tariff impacts. However, it’s noteworthy that while BYD is expanding, other Chinese companies, like Great Wall Motors, have withdrawn from the European market, indicating mixed success among different manufacturers.


Reporter:

BYD is facing a relatively low tariff of 17.4%, partly due to their local manufacturing efforts and their active marketing in Europe, like sponsoring events in Germany.


Rózsa Tamás – Managing Director, Top Tier Consultants:

BYD is integrating into the European economy and has strong growth prospects, which justifies their lower tariffs. They are leveraging advantages available only in China, but within the bounds of fair competition.


Reporter:

You mentioned that the most environmentally harmful parts of production are often the most subsidized. Does local assembly, like BYD’s in Szeged, bypass environmental regulation differences?


Rózsa Tamás – Managing Director, Top Tier Consultants:

If energy-intensive and less environmentally friendly processes are conducted in countries with lax regulations, the overall environmental impact doesn’t improve. The EU’s carbon tariff system aims to address this, but how effectively remains to be seen.


Reporter:

We’ll see how this unfolds after July 4th. Thank you, Tamás Rózsa, Managing Director of Top Tier Consultants, for joining us and discussing this issue.


The full audio recording is available at the link below:



Jazzy Radio 2024. Júne 11.

BUSINESS CLASS - ENCOURAGING THE PURCHASE OF ELECTRIC CARS IN THE 27 MEMBER STATES OF THE UNION - TAMÁS RÓZSA, MANAGING DIRECTOR OF TOP TIER CONSULTANTS

 

Reporter:

Good morning. On June 11, 2024, at 7:36 AM on Jazzy Biznisz Plusz, we have Manninger Beáta and László Csaba with you. Here in the studio, we welcome Rózsa Tamás, Managing Director of Top Tier Consultants. Today, we will discuss the electric car market. Our first question is whether the recent European Parliament elections will significantly rearrange the European political landscape, potentially leading to radical changes in the support system for electric cars, either at the EU or national levels. Good morning, Tamás, what is your view?


Tamas Rozsa – Top Tier Consultants:

Good morning. I don't think there has been such a significant change in the European Parliament that it would cause a dramatic shift in the support for electric cars. The regulation adopted in 2023 by the European Parliament has been established and, while not perfect, may require some modifications. The recent elections will not have a substantial impact on the regulation of electric cars. The real influence will come from the experiences and data related to these regulations, especially the restrictions, rather than the support systems, which vary greatly across different countries.


Reporter:

Our main topic today is that the ACEA, an industry organization, has published a report on the various incentive systems for electric cars in the 27 member states, particularly concerning tax incentives. Given that the customs system is unified in the EU and VAT systems are significantly harmonized, shouldn't these tax incentive systems also be harmonized? Doesn't the current diversity distort the market?


Tamas Rozsa – Top Tier Consultants:

Indeed, it is not unified. There are many types of taxes and incentives related to cars, such as VAT, road usage fees, and registration taxes. Different countries have different incentives that may or may not motivate people to buy electric cars. It is justified to have different support systems, whether through taxes, direct support, or road usage privileges. The goal is to promote the purchase of electric cars, which varies by country.


Reporter:

In Germany, they have phased out the support, which may have contributed to the slight slowdown in enthusiasm for electric cars in Europe. For instance, a Chinese company, Great Wall, announced that they are closing a facility in Munich. In Hungary, an electric battery factory in its trial phase laid off six hundred employees. Is this solely due to the reduction in German tax incentives, or is there a broader uncertainty in the market?


Tamas Rozsa – Top Tier Consultants:

The reduction in German tax incentives was implemented at the beginning of last year. In the UK, there has never been significant support for electric cars, yet sales have been good. In France, the support is more stable, and so is the growth in sales. Where people are used to fluctuating support, they may wait when there is no support. I don't think the support system alone determines the sales of electric cars. For car manufacturers, selling electric cars is crucial to avoid penalties and maintain a clean image. Nobody wants to be labeled as a polluter.


Reporter:

Can you explain the penalties, as not all our listeners might be familiar with the EU penalty system for failing to meet emission requirements?


Tamas Rozsa – Top Tier Consultants:

Emission requirements are measured by the amount of CO2 emitted per kilometer. If a car manufacturer exceeds the set limit by one gram, they must pay a fine of 95 euros per car. This can be very severe, as differences of 100-200 grams can occur with larger cars. The fines can reach billions of euros, potentially wiping out the profitability of the car sector if they fail to sell enough electric cars.


Reporter:

This would also deplete resources for future development, creating a vicious cycle.


Tamas Rozsa – Top Tier Consultants:

Exactly. Recently, car manufacturers have been able to raise prices due to supply chain issues, compensating for profitability shortfalls. However, nobody wants to be labeled a polluter. Car manufacturers must meet the emission quotas set by the EU. On the consumer side, people who want to travel from point A to point B find electric cars' shorter range and longer charging times a hindrance, making their use more complicated.


Reporter:

That's why many people avoid public transport, as they don't want to adapt to schedules.


Tamas Rozsa – Top Tier Consultants:

Yes, that's a plausible reason. Car dealers play a crucial role in educating customers about whether an electric car suits them. For instance, if someone can't charge their car at home, it's not advisable to buy an electric car, as 85% of charging happens at home.


Reporter:

So if someone lives in a high-rise apartment, they can't easily charge their car.


Tamas Rozsa – Top Tier Consultants:

People can find public chargers, but it complicates their lives. Car dealers in Hungary earn less from selling electric cars because they are more expensive and require less maintenance.


Reporter:

It's interesting that dealers earn less from selling more expensive cars.


Tamas Rozsa – Top Tier Consultants:

Yes, the profit margin is smaller. The production cost is higher, leaving less room for profit. If a customer is looking for a much cheaper car, they might not be inclined to buy an electric one. Therefore, the trade doesn't favor electric cars because they are less profitable. Unlike in Western Europe, where there is a significant market for electric cars, Hungarian dealers can afford to dislike electric cars because they don't sell as many.


Reporter:

In Western Europe, especially in Norway, I hear people keep their traditional petrol or diesel cars alongside their electric ones, using the electric car for short trips and the conventional car for longer journeys. Is this a common model?


Tamas Rozsa – Top Tier Consultants:

It makes sense. Long-distance travel with an electric car requires serious commitment. In wealthier Western countries, more families can afford two cars, one of which can be electric for short trips while the other is petrol or diesel for longer journeys. The cost dynamics are different when the average transaction cost for a car is much higher compared to Hungary.


Reporter:

Will electric cars become more affordable over time, like other innovations? For example, the iPhone was once very expensive but became more accessible over time.


Tamas Rozsa – Top Tier Consultants:

It's a valid question. The issue is whether European bans will come into effect before electric cars become affordable. If they do, the Central and Eastern European market could collapse because high transaction costs are unaffordable for most people.


Reporter:

Chinese manufacturers might step in and address this affordability issue across Europe.


Tamas Rozsa – Top Tier Consultants:

That's likely. We still have many questions, but unfortunately, we've run out of time for this interview. Thank you, Rózsa Tamás, Managing Director of Top Tier Consultants, for joining us. We promise to continue discussing the car market and electric vehicles in the future. Thank you.


The full audio recording is available at the link below:



G7 2024. May 21.

"Before there was a plan A and a plan B, now employers are throwing up their hands" - this is how the Hungarian car industry is drowning.

 

There are specific and potentially longer-term reasons behind the March slump and weaker-than-expected sales. According to Tamás Rózsa, managing director of Top Tier Consultants, one single effect is one of the most important.


No trend reversal, but not all is well


Such fluctuations are normal, so there is no trend reversal, it's not a case of going back to combustion engine technology.


The biggest potential for growth is still in electric cars, we just can't say how much of a ramp-up it will be

- said Tamás Rózsa.


Prices are also limiting the pace at which electric cars can scale up to meet emissions targets, according to Tamás Rózsa. The trend in recent years has been that the number of new electric cars sold has increased by around 500,000 a year compared to the previous year. However, this is only about half of the increase needed to meet the EU's 2030 emissions targets in this area.


"If e-cars were cheaper, more of them could be sold, but on a market basis, only if more are sold will production become economies of scale and therefore cheaper," he outlined this contradiction, adding that the state could be the actor that could resolve this. Of course, the emergence of cheaper Chinese models could also bring prices down, but Tamás Rózsa does not expect Chinese cars to overwhelm the European market.


"Chinese companies are in a hurry to exploit their technological and price advantage because European manufacturers are also developing and catching up.


My view is that Chinese manufacturers will not achieve a market share of more than 10 percent in Europe by 2030."

- he said.


The full article is available at the link below:



TOP24 2024. May 21.

"Before there was a plan A and a plan B, now employers are throwing up their hands" - this is how the Hungarian car industry is drowning.

 

There are specific and potentially longer-term reasons behind the March slump and weaker-than-expected sales. According to Tamás Rózsa, managing director of Top Tier Consultants, one single effect is one of the most important.


The first quarter of electric car sales is usually weaker each year than the last quarter of the previous year. Since electric cars are the biggest contributors to reducing carbon emissions, manufacturers are trying to sell many of these models at the end of the year to meet the emission quotas that European regulations require them to meet.

- he said.


Tamás Rózsa also said that the fact that emission quotas are regularly reduced, and that such a reduction is due in 2025, could be a decisive factor now, so there is not as much incentive for manufacturers to introduce new electric models this year. Many of these may be timed for next year.


However, a key factor in the introduction of new models, even this year, could be that, as it is new technology, manufacturers are more likely to delay plans. And the time to market may well be longer than for internal combustion engine models.


In addition, the recent introduction or significant reduction of state subsidies for the purchase of electric cars in several major European markets, such as France and Germany, has contributed to the lower than expected figures.


The full article is available at the link below:



Jazzy Radio 2024. May 14.

BUSINESS CLASS - IN MARCH, THE EU CAR MARKET SAW A 5.2% DROP IN NEW CAR REGISTRATIONS - TAMÁS RÓZSA, HEAD OF TOP TIER CONSULTANTS

 

Reporter:

Good morning. On May 14, 2024, at 7:43 AM on Jazzy Business Class, Manninger Beáta and László Csaba are here with you. In the studio, we welcome Rózsa Tamás, managing partner of Top Tier Consultants and an automotive market expert. Honestly, I don't know many such experts in the city, so thank you very much for coming. It's always exciting to see how car sales are developing in Europe, Hungary, and around the world. How green our lives are, and how this improves air quality. In March, a data point caught everyone's attention: the sales ratio of electric cars decreased in Europe. This was true for the first three months, but how do you evaluate the trends in the car market at the beginning of the year for new car sales? Good morning, Tamás.


Rózsa Tamás – Top Tier Consultants:

Good morning. Good morning. The first quarter, especially for electric cars, is always significantly weaker than, for example, the last quarter. We see this trend every year because electric cars contribute the most to reducing carbon dioxide emissions. In the last quarters, car manufacturers put many cars on the market, particularly electric cars, to meet the carbon dioxide quotas required by European regulations. So, the decrease in the first quarter is programmed into the market trends. Additionally, European carbon dioxide emission quotas decrease over time. For example, in 2025, there will be a significant reduction, while in 2023 and 2024, there isn't. Therefore, there isn't as much motivation for car manufacturers to introduce new products or sell many electric cars this year. This is more likely to happen next year.


Reporter:

Regarding electric cars, as a layperson reading the news, it seems that interest is declining because more chargers are needed, and the high prices are also a factor. Where do we stand in this regard?


Rózsa Tamás – Top Tier Consultants:

The question of declining interest depends on what it's compared to. Over the past four years, the number of electric cars has increased by 400,000 to 500,000 each year in Europe. By the end of last year, we reached 2.2 million electric cars sold in Europe. If this growth continues at 500,000 annually, the growth rate decreases, but not the growth itself. As I mentioned earlier, 2025 will be crucial. The European regulations set significant milestones for 2030 and 2035, stating that by 2030 only plug-in hybrids will be legal, and by 2035, only electric cars will be allowed. If the annual growth of 500,000 continues, we will only reach 5-6 million electric cars by 2030, compared to the needed 10-12 million to comply with European carbon dioxide emission regulations. This is very important for car manufacturers because they face substantial fines if they don't meet the carbon dioxide quotas and it would also be very damaging to their image if they were labeled as polluters. Therefore, they are doing everything possible to sell the minimum required number of electric cars to comply with European regulations.


Reporter:

Where do hybrids stand in terms of interest?


Rózsa Tamás – Top Tier Consultants:

Hybrids are currently growing, but there are two types: plug-in hybrids and self-charging hybrids. Plug-in hybrids, if used smartly, can significantly reduce carbon dioxide emissions. However, if they are not charged, there isn't much point because they carry a relatively heavy battery. Self-charging hybrids, which only run on gasoline, do not solve the 2035 problem because they still rely on gasoline, even though they consume less. The other issue with hybrids is that European manufacturers traditionally do not have hybrid technology; this is mainly Japanese, such as Toyota and Nissan. So, hybrid technology is not particularly specific to European brands; it is more dominated by Japanese manufacturers like Toyota and Lexus.


Reporter:

It's interesting to see that nearly 50% of cars are still gasoline or diesel. Even diesel accounts for more than 12%, according to the latest data. So, we can't say that diesel has completely disappeared. Are car manufacturers technologically prepared for the 2030 and 2035 deadlines? And what about the charging network?


Rózsa Tamás – Top Tier Consultants:

Technology has developed a lot in the past five years. It's worth noting that when someone tries an electric car in Europe, the best electric cars represent technology from 3-4 years ago because that's when they were designed. Current technology is quite different from the cars on the road now. The European automotive industry will catch up technologically within a reasonable timeframe. The electric cars currently on the market are already quite usable. It's not about the average daily distance of 30-40 kilometers because people sometimes want to travel longer distances. The question is how much inconvenience people are willing to accept, for example, if they want to travel to the Croatian coast. If someone isn't willing to travel an extra hour, then an electric car is not for them. Electric cars aren't better technologically than gasoline or diesel cars; they have a shorter range and are a bit less convenient. But to combat global warming and improve urban air quality, it's worth using electric cars.


Reporter:

I usually say that if someone doesn't believe in global warming, that's their right. But if the air in cities like Budapest, Beijing, and others is cleaner, our children and grandchildren will be healthier. And we'll see what happens with the climate. I'm not a climate change denier, just to be clear, but I try to convince skeptics around me that, at least for the sake of cleaner air, we should support electric transportation.


Rózsa Tamás – Top Tier Consultants:

That's undoubtedly true. The question is what we can afford in terms of electric cars. Producing electric cars is clearly more expensive than producing gasoline or diesel cars.


Reporter:

Will this still be the case in 10-15 years?


Rózsa Tamás – Top Tier Consultants:

No, we thought a few years ago that by the late 2020s, this parity would be achieved. This hasn't happened yet due to rising raw material costs, but the cost of batteries is decreasing steeply, which primarily determines the cost of electric cars. In Hungary, it's not the absolute cost that matters, but that diesel or gasoline cars were cheaper here than in Germany. However, electric cars cost the same everywhere, so in Hungary, the price difference is even greater. A mass-market car buyer doesn't want to pay more for an electric car just because it's electric. A premium car buyer is more willing to do so.


Reporter:

You mentioned earlier that the electric cars on the market now were designed 3-4 years ago. Can we say that the development of electric cars is progressing similarly to mobile phones, with new series being released regularly?


Rózsa Tamás – Top Tier Consultants:

Yes, car manufacturers are aware that cars could be priced out of the market if they remain expensive, so they are doing everything they can to produce cheaper electric cars. The cost of battery cells is a key factor in determining the price of electric cars. The efficiency of batteries is improving year by year, and small improvements, like better battery cooling, can significantly increase range. These small improvements can also lead to cost-effectiveness.


Reporter:

The charging network is another constant issue. How do you see the state of the charging network in Europe and Hungary?


Rózsa Tamás – Top Tier Consultants:

The charging network varies greatly across different countries. The spread of electric cars is primarily determined by home charging. In Hungary, electric cars accounted for 5% of new car sales in 2023. In Western Europe, such as the Netherlands, Germany, and France, the charging network is well-developed. In Hungary, there are only about three thousand chargers, which will eventually limit the spread of electric cars, but not at the current 5% level. Increasing this to 10-15% of new car sales is still manageable.


Reporter:

We could talk a lot more about this. I think we'll have you back, Tamás, because I'm also interested in the pricing of electricity, whether it's home charging or highway charging. These prices can vary greatly. With fuel, we are used to a 5-10% difference between gas stations. The differences can be much larger with electric charging, right?


Rózsa Tamás – Top Tier Consultants:

Yes, the differences are larger.


Reporter:

Thank you very much for being with us, Tamás. We promise to return to this topic in the future.


Rózsa Tamás – Top Tier Consultants:

Thank you very much.


The full audio recording is available at the link below:



Index 2024. February 14.

BYD or Tesla: could Szeged tip the scales?

 

For Szeged, BYD's investment is an opportunity to accelerate economic development, diversify the local economy and position the city as a centre of green technology and manufacturing, Tamás Rózsa, managing director of Top Tier Consultants, told Index.He analysed the present and future of electromobility in detail, touched on the duel between BYD and Tesla, and also mentioned environmental concerns related to battery factories.

According to experts, the key to BYD's success, and even its international expansion, is that the Chinese automaker, which is revolutionising electromobility, uses 75 percent of its own components in its vehicles, making it much more efficient than the US automaker Tesla, which has so far forced the European car industry to compete on price, with a 16 percent profit margin. The big question is what the outcome of this market turnaround will be and what the medium- to long-term impact will be on the industry's US-European-Asian centre of gravity. BYD's investment in Szeged, which is also a major investment in the national economy, worth around €5 billion, or more than HUF 1900 billion, is also creating a new situation in the domestic automotive industry, and we asked an automotive expert with a deep insight into the subject.


Electric cars could become more attractive

The market dynamics between BYD and Tesla could accelerate major changes in the automotive industry, potentially changing the competitive landscape, spurring innovation and shifting the global centre of gravity of the industry. The scale of these effects will depend on a number of factors, including technological developments, consumer preferences, regulatory changes and the strategic responses of other car manufacturers

- Tamás Rózsa, Managing Director of Top Tier Consultants, began by telling Index.


The full article is available at the link below:



Szeged365 2024. Február 14.

What do the Chinese bring to Szeged? We can be a centre of green technology and manufacturing with the new BYD factory


For Szeged, BYD's investment is an opportunity to accelerate economic development, diversify the local economy and position the city as a centre of green technology and manufacturing, said Tamás Rózsa, Managing Director of Top Tier Consultants.


The expert also pointed out that as the industry develops, governments are introducing new regulations and policies to support domestic manufacturers, ensure fair competition and promote sustainable transport. These may include incentives to encourage the production and purchase of electric vehicles, tariffs or restrictions on imports, and stricter environmental standards. This type of regulation affects competition and the strategic choices of car companies.


At the end of the day, however, the real winner is the positive environmental impact of a shift towards more efficient and competitive electric car production, reducing carbon emissions and dependence on fossil fuels. The success of companies focused on sustainable transport solutions can accelerate the global transition to greener mobility options.


The full article is available at the link below:



Vezess 2024. January 25.

New winds blowing in the Mercedes-Benz commercial vehicle sector

 

The largest Mercedes-Benz Van Centre in Hungary and the region has opened in Fót, at the Jász Plasztik Autócentrum. On the occasion of the opening, the Stuttgart brand's domestic importer held a press conference on the future of its own-brand commercial vehicles.


Having enough charging stations is not only an issue for corporate customers.

Our region is rather underdeveloped in the field of charging stations, which is why there is a need to install electric charging stations. However, this is not the only obstacle to the take-up of electric vehicles, as they are one and a half to two times more expensive than conventional vehicles.

- Tamás Rózsa, managing director of Top Tier Consultants Ltd. and automotive consultant, said at the press conference.


He added: "Hungarians are used to petrol cars being 25 percent cheaper in Hungary, but this will not always be the case, and over time it will become more expensive to maintain conventional vehicles. This is due to the fact that suppliers and component manufacturers started to switch to electric cars 6-8 years ago. As the major manufacturers seek to serve the large Western European and Northern European markets, they are radically reshaping their product portfolios, most of which now consist of electric vehicles.


The question often arises as to whether there will be enough energy to charge electric vehicles. Tamás Rózsa said that the energy needs of vehicles currently on the road and the electric vehicles that will be placed on the market in the future are the same. As for the switchover, he said that even if sales of combustion vehicles were to end today, the technology would still be with us for at least another 20-25 years, so it is not worth dreaming about what would happen if everything went electric tomorrow and then had to be charged at the same time.


The full article is available at the link below:



Index 2024. January 23.

We are reaching into our pockets now to make it good for our grandchildren.

A sustainable, environmentally friendly solution is often more expensive, according to a roundtable discussion on electromobility, where experts from Mercedes-Benz, E.On and Top Tier Consultants shared their thoughts. For passenger cars and light commercial vehicles, they said: car manufacturers are moving in the same direction, it's not a question of whether there will be a green transition, but how it will happen. The challenge is rather whether the expansion of the charging network will be able to keep pace with the increase in production capacity.


The era of cheap cars is over

"The world of cheap petrol cars is not coming back. Emissions need to be reduced and the technologies to do it are more expensive," said Tamas Rozsa. He recalled that the component manufacturers behind the car companies have been preparing for the electric transition for eight to ten years, the question is not whether the process will happen, but only how. No other realistic vision for the future of motoring is on the agenda. The global commitment is demonstrated by the fact that a third of sales are already electric vehicles in China, 25% in the European Union, but there is also a commitment to going green in the rest of Asia and the United States. It is also telling that large OEM's such as Mercedes-Benz, the Volkswagen Group, Stellantis and the BMW Group have cut their R&D and innovation spending on electric motors by an average of 80 per cent.


According to Top Tier's CEO, there are three pillars to the electric transition, which are:

1. Have the necessary manufacturing capacity.

2. Have the necessary charging infrastructure in place.

3. Provide an attractive product range by the manufacturers and dealers.


According to the automotive industry consultant, manufacturing capacity is so secure that there is almost more than there should be. This is true even if we are sometimes witnessing a deterioration of electric car manufacturers' market capitalization or a lower/ delayed realization of planned investments by the relevant market players. According to Tamas Rozsa, there is no point in talking about cars and small cars separately in the field of electromobility, as there are synergies in terms of research and development, but also in terms of component supply. On the second point, we can say that there are not enough chargers in the region, in Europe or globally.

THE RWQUIRED ELECTRICITY IS AND WILL BE THERE, BUT IT IS HARD WORK TO BUILD THE NECESSARY INFRASTRUCTURE.

On the energy side, let's not forget that the mass demand is not needed immediately, because even if only electric cars could be sold from tomorrow, it would still take 20-25 years for internal combustion engine vehicles to be phased out. As for the range of products, the expert says that the majority of future drivers are no longer lovers of petrol, horsepower, torque and revving engines, they simply want to get from point A to point B.


The full article is available at the link below:



Portfolio 2023. June 7.

A time bomb is ticking in the European car industry, with factory closures likely

The automotive industry is undergoing significant changes, mainly due to the transition to electric cars, but a number of other factors have also complicated the situation in the sector in recent years. According to the latest analysis by Top Tier Consultants, the impact of these changes will also be felt in the labor market, with suppliers being hit the hardest. The changing market environment is also likely to lead to capacity review, which will ultimately lead to a reduction in manufacturing capacity in Europe.


The full article is available at the link below:



Világgazdaság 2023. May 23.

A wave of Automotive plant closures in Europe - Without Chinese batteries, the Hungarian automotive industry would not be safe.

The production of internal combustion engine (ICE) vehicles will inevitably cease, and capacity reductions are an unavoidable issue. The development of the automotive industry in Hungary can only be sustained if the manufacturers of electric vehicles and components locate here.


What is the consequence of the fact that fewer and fewer cars are being produced in Europe?

The drop in production demand outlined above will have a devastating impact, based on the fact that during Covid production capacity fell below 50% utilization. However, car manufacturers have not been financially hit as the shortage of chips has also led to a general shortage of cars and higher margins. However, as supply chains normalize, carmakers will need to return to the ideal 75-80 per cent capacity utilization - which is a long way off - and the current 55-65 per cent is unsustainable, essentially signaling substantial overcapacity.

At this point, although capacity reduction is a very sensitive issue, it is inevitable.

If only because it is a reality. Ford has announced the closure of its Saarlouis plant in Germany, but it will certainly not be the last. Top Tier Consultants has identified 12 factories in Europe that have no expected announced electric car programme. These have a combined production capacity of 2.5 million cars.


Lessons learnt

It is clear that there is a huge potential for new technologies in the automotive industry. They are the key to enabling a region or a country to grow in a declining market. This could be a major argument for Hungary to become a major player in the battery industry. There is much public criticism of the Chinese investments planned here, but it is not worth disputing the fact that without far-eastern batteries the Hungarian automotive industry would not be safe either. The Hungarian automotive industry had its best year ever in 2022: it employed 150,000 people, the sector's production value exceeded EUR 30 billion and its export ratio was around 90 percent.

The development of the automotive industry in Hungary can only be sustained if a large proportion of manufacturers of electric cars and their components locate here. The development of a complete electric car value chain will provide an obvious competitive advantage, while the production of ICE engine products will inevitably disappear

- said Tamás Rózsa, Managing Director of Top Tier Consultants.

The full article is available at the link below:


Világgazdaság 2023. May 18.

Hungarians can say goodbye to small and cheap cars, but Chinese brands are coming.

At best, the price of electric cars in Europe will only fall by the end of the decade. This will play into the hands of Chinese brands, which will break into the market, but it will take years for them to spread.

Europe is the region where car sales will fall the most between 2019 and 2023, by more than 20 percent, Top Tier Consultants (TTC) pointed out. In comparison, sales in the US and Japan fell by only 10 percent, and China grew by 3 percent.


How do companies decide which cars to make?

The last three years have not only seen a downturn in sales volumes, but also a complete transformation of the product portfolios produced. Tamás Rózsa, Managing Director of the TTC, shared their latest analysis with Világgazdaság, pointing out, among other things, that in a completely unusual way, supply chain constraints and shortage management have forced car manufacturers to

to produce largely only those products that offer higher profits.

However, somewhat surprisingly, it is not only large and upper mid-range cars that are doing well, but also low-cost cars. The reason is that these models require very few chips, so they are not so difficult to produce. The losers are clearly small and lower mid-range cars, especially in developed markets. These require large amounts of chips, also to meet emissions and safety standards, and have below-average profit margins for all car manufacturers.

The full article is available at the link below:


Portfolio 2023. May 17.

50 million cars have disappeared without a trace - What happened here?

The successive crises of recent years have hit the automotive industry at a very critical point in time. The transition to electrification has radically changed the sector, and the challenging technological shift has been compounded by the Covid crisis with its supply chain disruption and chip shortages, and later by war in Ukraine and the energy crisis, not to mention the global inflation and other macroeconomic challenges. All these factors have made it very difficult to create accurate forecasts automotive industry in recent years, but now the picture is beginning to clear – although on the downside for Europe unfortunately. This is shown by the latest forecast from Top Tier Consultants, which foresees a combined 50 million fewer cars sold in Europe by 2030 compared to the last forecast before the pandemic.


The full article is available at the link below:



Portfolio 2023. February 12.

The continued rise of e-mobility and China are the certainty in the turbulent Automotive Industry in Europe in 2023.

It will be a tough year for the automotive market in 2023, but the good news is that we may be in for better times than last year. Unfortunately, there are still negative risks, but we can identify a few safe havens

2022 saw the global vehicle market stagnate with large geographical differences: Europe, as it has done every year since 2019, fell again last year by 6%, from 20.7 million vehicles sold in 2019 to 14.8 million in 2022, while China and South East Asia grew, leaving the global market at 81 million. The forecast for the European market is for slight growth in 2023, but the optimistic forecast is still for the 2023 market to remain below the 2021 market. The expected slight growth is mainly

The full article is available at the link below (Hungarian language):


Világgazdaság 2023. February 4.

Nothing will ever be the same again - Goodbye Western cars, the era of Chinese brands is coming to Hungary.

In a Top Tier Consultants' latest analysis, Tamás Rózsa, Managing Director, pointed out that 2022 will bring stagnation in the global vehicle market, but there are big geographical differences: the European vehicle sales volume, as in every year since 2019, has decreased last year too, this time by 6 percent. Sales fell from 20.7 million vehicles in 2019 to 14.8 million in 2022. In contrast, China and South-East Asia grew, maintaining the global market at 81 million sales.

The European market is forecasted to grow slightly in 2023, but even in this optimistic scenario, the 2023 market will remain below the 2021 market size. The slight growth expected is mainly due to the unmet demand of previous years, mainly due to the shortage of microchips

- Rozsa explained. The uncertainty in the forecasts is quite high, especially from a macroeconomic perspective. The main factors are:

  • a possible recession,

  • inflation,

  • and the prolongation or possible end of the war in Ukraine.

Another negative risk is whether the Covid situation will cause another short-term supply disruption in China. Positive uncertainty is the continuation of state support. However, overall, negative risks dominate in the automotive industry's forecasts and it cannot be ruled out that 2023 will be another year of stagnation in Europe.


The full article is available at the link below:

Joint publication by EY and Top Tier Consultants 2022.October 25-27.

The Hungarian automotive industry is really feeling the energy crisis.

Top Tier Consultants warns that the energy crisis could put an end to the growth of Hungarian automotive suppliers.

Energy costs have doubled in weight in their costs this year. The profitability achieved by car manufacturers in recent years has also benefited Hungarian suppliers. According to Top Tier Consultants' analysis, the domestic supplier industry has grown by 7-10% per year, excluding the Covid year 2020.

In 2021, the combined revenues of the 250 strongest players will reach nearly HUF 9,500 billion. However, the upward trend may be broken as

this year, the weight of energy in the cost structure of automotive suppliers has doubled to 4.7 percent compared to last year,

a real risk to their operations.


In total, our analysis has been published on more than 20 media platforms, details of which can be found on the following links:


24.hu: Már dörömböl az energiaválság az eddig szárnyaló autóiparban is http://24.hu/fn/gazdasag/2022/10/27/energiavalsag-autoipar/









autopro.hu: Most érzi igazán az energiaválságot a hazai autóipar




bonline.hu: Most érzi meg igazán az energiaválságot a hazai autóipar http://bonline.hu/cikk/150391/









Világgazdaság 2022. Apr 19.

Neighboring war could put domestic suppliers at the fore.

The European automotive supply chain as a whole is working on replacing the production of parts in Ukraine, a process that will also entail a short-term increase in the volume of Hungarian suppliers, the managing director of Top Tier Consultants told VG. Tamás Rózsa pointed out that

the automotive industry is sensitive to the fact that certain product groups - which rely on cheap Ukrainian labor - are currently not available

The full article is available at the link below:



Világgazdaság 2021. May 28.

A breakthrough in the Hungarian e-car market is inevitable.

The European market is not homogeneous in terms of the progress of electric cars either: while Hungary, for example, is still in the early adoption phase, Germany is already at the stage of mainstream customers and early mass adoption, said Tamás Rózsa, Managing Director of Top Tier Consultants, at an online conference organized by CIB Leasing.

In the early stages of market development, the main role is played by innovators who are wealthy enough to afford the new technology and willing to bear the initial disadvantages

- he added. The second stage is early adoption, when it is worth considering pure electric or hybrid vehicles for specific applications, taking into account certain incentives such as free parking or lower energy costs. The third is the early mass-market phase, when the conditions are already in place to make the purchase of e-cars a realistic option for the average user, and the fourth is the widespread adoption phase.

However, the potential for mass uptake of e-cars is largely determined by the coverage of the charging network, the limits on the range of the vehicles and the high cost of new cars," said the CEO.

The latter will make public incentives important for some time to come.

However, achieving the ambitious targets set by the EU will require a mass emergence of mainstream customers, which will require a major effort from the main car manufacturers.

The full article is available at the link below:



Portfolio 2021. March 16.

Hungarian automotive suppliers receive powerful support - accurate forecasts in their planning processes based on the methodology of Top Tier Consultants.

The coronavirus crisis yet again highlighted several unknown situations in the Automotive Industry, putting the global supply chain to the test. In the current mode of operation, the lack of personal meetings and the reduction of the necessary communication have become a significant challenge, which makes it more difficult for the Hungarian SME sector to plan production. The good news, however, is that the solution is close to being resolved, as a customer-independent forecasting system is being set up with the support of the National Association of Hungarian Vehicle Parts Manufacturers (MAJOSZ).

Lacking forecasts, it is conceivable that in both, short-term production capacity planning and medium-term investment planning, the efficiency of smaller suppliers deteriorates, their costs increase, and they are not even able to judge exactly what new car programs they are able to quote for the time the programs start. Greater uncertainty, even on the part of banks and financiers, leads to greater caution and even higher costs towards such suppliers. This leads to an obvious competitive disadvantage compared to higher level Tier-1 direct suppliers. However, overcoming the challenge leads to a competitive advantage over competitors in a similar position to Czech, Polish, Slovak or perhaps Romanian SME suppliers. Because of this, the structural disadvantage of the sector can be turned into a competitive advantage and this work has already begun. the solution is now at your fingertips, as with the support of the national association of Hungarian vehicle parts manufacturers (MAJOSZ)

A CUSTOMER-INDEPENDENT FORECASTING SYSTEM IS BEING SET UP, THE METHODOLOGY PROVIDED BY TOP TIER CONSULTANTS, A STRATEGY CONSULTANCY SPECIALIZING ON THE AUTOMOTIVE SECTOR

Tamás Rózsa, managing director of the consulting company, said that the method already works for several suppliers and that the key novelty is to link the forecasts published by car manufacturers directly with the SKU numbers of suppliers in the Hungarian SME sector, which are updated every 3 months and provides a 7-year planning horizon.


See the full article:



Világgazdaság 2020. December 7.

Suppliers challenged by the green revolution.

By the decline of internal combustion engines, it is decided that the future belongs to electric propulsion. Switching is easier for carmakers and more difficult for domestic suppliers.

Tamás Rózsa, CEO of Top Tier Consultants, a strategic consultancy, emphasized that only companies that are able to supply parts for electric vehicles can look to the future with optimism.

The warnings are not without merit, business and political decisions that accelerate the spread of electric propulsion, as well as the loss of the market for purely internal combustion designs, are made one after another.

Tamás Rózsa told the Világgazdaság News that one of the goals of Euro 7 is to force the market for even faster electrification. At the same time, he said, it would not be possible to eliminate internal combustion technology from the middle of the decade, as neither the industry nor consumers were ready for that.

But the fact is that this will be the last emission standard before the era of all-electric propulsion

he added. The forecast for the share of electric cars has improved a lot, to 13 per cent by 2025 and 40 per cent by 2030, but this is still far from the 53 per cent that would meet the EU’s CO2 emissions target.

The Euro 7 standard will neither increase nor decrease sales, leaving around 20 million units in Europe. It is a question of who will produce this quantity and where.

The fate of the Hungarian factories is basically determined by the group-level electrification plans, including Audi under the auspices of VW, Daimler and BMW, which is building a new car plant in Debrecen, Hungary. Suzuki would need a renewal. It is also true for the Suzuki Esztergom plant that it could be re-tooled for a maximum of a few hundred million euros, but the breakthrough product is still missing from the portfolio of the Japanese brand. The Expert is not worried about domestic factories - PSA-owned Opel producing only petrol-powered engines in Szentgotthárd, is predictable in the medium term - but about the supply chain, which focuses primarily on the current consumer demand side of emobility and not on stricter regulations and finds it risky to build higher volume capacities.

Yet those who are not involved in the supply of electric vehicle parts are pushed out of the market soon. This message didn't seem to go through.

-he pointed out.

See the full article:



National News-1 2020. December 7.

Electric cars are spreading much faster than one would have thought

The advancement of electric driving is happening at a faster pace than previously expected, and the switchover is easier for vehicle assembly factories and more difficult for suppliers, says industry experts, which was outlined in Monday’s issue by the Világgazdaság.

Suppliers focus mainly on the car buyer demand and not on tightening regulations. Of these, only those who can deliver parts for electric vehicles can be optimistic. It is encouraging that the share of Central and Eastern Europe in automotive production has so far increased, and this trend will continue with electrification.

Tamás Rózsa, CEO of Top Tier Consultants, a strategic consultancy, emphasized that only companies that are able to supply parts for electric vehicles can look to the future with optimism.

The warnings are not without merit,

business and political decisions that accelerate the spread of electric propulsion, as well as the loss of the market for purely internal combustion designs, are made one after another.

According to Tamás Rózsa, the fate of the Hungarian factories is basically determined by the group-level electrification plans, including Audi under the auspices of VW, Daimler and BMW, which is implementing a new unit in Debrecen. Suzuki would need a renewal. It is also true for the Esztergom plant that it could be recalibrated for up to a few hundred million euros,

the breakthrough product is still missing from the portfolio of the Japanese brand.

The Expert is not worried about domestic factories - PSA-owned Opel producing only petrol-powered engines in Szentgotthárd, is predictable in the medium term - but about the supply chain, which focuses primarily on the current consumer demand side of emobility and not on stricter regulations and finds it risky to build higher volume capacities.

"Yet those who are not involved in the supply of electric vehicle parts are pushed out of the market soon. This message didn't seem to go through."

– he pointed out.

See the full article:




HVG 2020. December 7.

Many suppliers have not yet realized that electric cars also need to be addressed

Group-level electrification plans may determine the fate of Hungarian car factories. Large factories have an easier time switching, suppliers have a harder task.

According to Tamás Rózsa, CEO of Top Tier Consultants, a strategic consultancy,

the fate of the Hungarian factories is basically determined by the group-level electrification plans, including Audi under the auspices of VW, Daimler and BMW, which is building a new car plant in Debrecen, Hungary. Suzuki would need a renewal

- he said

The Expert is not worried about domestic factories - PSA-owned Opel producing only petrol-powered engines in Szentgotthárd, is predictable in the medium term - but about the supply chain, which focuses primarily on the current consumer demand side of emobility and not on stricter regulations and finds it risky to build higher volume capacities.

"Yet those who are not involved in the supply of electric vehicle parts are pushed out of the market soon. This message didn't seem to go through."

– he pointed out.

See the full article:




Infostart 2020. December 7.

There are already those who say that the green revolution is too fast.

As part of this, some reactions to automotive emission numbers may be "overheated". The advancement of electric driving is happening at a faster pace than previously expected, and the transition is easier for carmakers and more difficult for suppliers, says the industry experts' assessment of the situation in the Világgazdaság on Monday. Suppliers are focusing mainly on current car buyer demand and not on tightening regulations. Among suppliers

only those who are able to supply parts for electric vehicles can be optimistic, says Tamás Rózsa, CEO of Top Tier Consultants

It is encouraging that the share of Central and Eastern Europe in automotive production has so far increased, and this trend will continue with electrification.

The transition to new technologies, especially the advancement of electric cars, is proceeding at a much faster pace than previously expected - József Nyírő, President of the National Association of Hungarian Vehicle Components Manufacturers, spoke to the leaders of automotive companies. He stated that the trend should be acknowledged by all Hungarian industry players.

The warnings are not without merit, business and political decisions that accelerate the spread of electric propulsion, as well as the loss of the market for purely internal combustion designs, follow one after the other.

According to Tamás Rózsa, the fate of Hungarian factories is basically determined by group-level electrification plans,

some have a positive outlook:

- Audi under the auspices of VW,

- Daimler and

- BMW, which is building a new plant in Debrecen.

Suzuki would need a renewal. It is also true for the Suzuki Esztergom plant that it could be re-tooled for a maximum of a few hundred million euros, but the breakthrough product is still missing from the portfolio of the Japanese brand. The Expert is not worried about domestic factories - PSA-owned Opel producing only petrol-powered engines in Szentgotthárd, is predictable in the medium term - but about the supply chain, which focuses primarily on the current consumer demand side of emobility and not on stricter regulations and finds it risky to build higher volume capacities.

"Yet anyone who is not involved in the supply of electric vehicle parts will be pushed out of the market. This message seems to have not gone across," he noted.

See the full article:




Figyelő 2020. December 7.

SUPPLIERS FACE MORE DIFFICULTY WITH GREEN REVOLUTION

The advancement of electric driving is happening at a faster pace than previously expected, and the switchover is an easier task for carmakers and a more difficult task for suppliers, according to an analysis by industry experts in Monday's issue of the Világgazdaság.

Tamás Rózsa, CEO of Top Tier Consultants, a strategic consultancy, emphasized that only companies that are able to supply parts for electric vehicles can look to the future with optimism.

The warnings are not without merit, business and political decisions are made one after another, that accelerate the spread of electric propulsion, as well as the loss of the market for purely internal combustion designs, .

As the world’s largest carmaker, the Volkswagen Group already plans to spend € 73 billion on electric and self-driving and digitization over the next five years.

At the regulatory level, the current version of the yet uncertain Euro 7 standard on the European Union's agenda will take into affect in 2025 would be even more painful, as it would place in the red zone all new vehicles, regardless of category, that produce any concentration of pollutants. This is technically not feasible for internal combustion engines.

Tamás Rózsa told the Világgazdaság that one of the goals of Euro 7 is to force the market for even faster electric mobility. At the same time, he said, it would be impossible to use internal combustion technology from the middle of the decade, as neither the industry nor consumers are ready for it.

But the fact is that this will be the last emission standard before the era of all-electric propulsion has arrived

-he added. The forecast for the share of externally chargeable electric cars has improved a lot, expected to be 13 per cent by 2025 and 40 per cent by 2030, but it is still far from the 53 per cent that would meet the EU’s CO2 emissions target.

The fate of the Hungarian car making factories is basically determined by the group-level electrification plans, including Audi under the auspices of VW, Daimler and BMW, which is implementing a new unit in Debrecen. Suzuki would need a renewal. It is also true for the Esztergom plant that it could be recalibrated for up to a few hundred million euros, but

the breakthrough product is still missing from the portfolio of the Japanese brand.

The Expert is not worried about domestic factories - PSA-owned Opel producing only petrol-powered engines in Szentgotthárd, is predictable in the medium term - but about the supply chain, which focuses primarily on the current consumer demand side of emobility and not on stricter regulations and finds it risky to build higher volume capacities.

Yet those who are not involved in the supply of electric vehicle parts are pushed out of the market soon. This message didn't seem to go through

– pointed out Tamás Rózsa.

See the full article:



AutoPro 2020. December 7.

Domestic suppliers can face problems with electromobility.

The advancement of electric driving is happening at a faster pace than previously expected, and the switchover is easier for carmakers and more difficult for suppliers, says the industry experts' assessment of the situation in Monday's issue of the Világgazdaság.

Suppliers focus mainly on current carbuyer demand and not on tightening regulations. Of these, only those who can deliver parts for electric vehicles can be optimistic. It is encouraging that the share of Central and Eastern Europe in automotive production has already risen, and this trend will continue with electrification.

The transition to new technologies, especially the advancement of electric vehicles, is proceeding at a much faster pace than previously expected - József Nyírő, President of the National Association of Hungarian Vehicle Components Manufacturers, spoke to the leaders of automotive companies. He stated that all Hungarian sectoral actors should take note of the trend.

Tamás Rózsa, CEO of Top Tier Consultants, a strategic consultancy, emphasized that only companies that are able to supply parts for electric vehicles can look to the future with optimism.

The warnings are not without merit, business and political decisions that accelerate the spread of electric propulsion, as well as the loss of the market for purely internal combustion designs, are made one after another.

Industry experts claim that Suzuki is falling behind. According to Tamás Rózsa The fate of the Hungarian factories is basically determined by the group-level electrification plans, including Audi under the auspices of VW, Daimler and BMW, which is building a new car plant in Debrecen, Hungary. Suzuki would need a renewal. It is also true for the Suzuki Esztergom plant that it could be re-tooled for a maximum of a few hundred million euros, but the breakthrough product is still missing from the portfolio of the Japanese brand. The Expert is not worried about domestic factories - PSA-owned Opel producing only petrol-powered engines in Szentgotthárd, is predictable in the medium term - but about the supply chain, which focuses primarily on the current consumer demand side of emobility and not on stricter regulations and finds it risky to build higher volume capacities. "Yet those who are not involved in the supply of electric vehicle parts are pushed out of the market soon. This message didn't seem to go through" - he pointed out.

See the full article:




Napi.hu 2020. December 7.

E-driving: suppliers could get into trouble

The advancement of electric driving is happening at a faster pace than previously expected, and the transition is easier for carmakers and more difficult for suppliers, the Világgazdaság writes based on industry assessments.

Suppliers focus mainly on current carbuyer demand and not on tightening regulations. Of these, only those who can deliver parts for electric vehicles can be optimistic. It is encouraging that the share of Central and Eastern Europe in automotive production has already risen, and this trend will continue with electrification.

The transition to new technologies, especially the advancement of electric cars, is proceeding at a much faster pace than previously expected - József Nyírő, President of the National Association of Hungarian Vehicle Components Manufacturers, spoke to the leaders of automotive companies. He stated that the trend should be acknowledged by all Hungarian industry players, MTI quotes the newspaper article as saying.

Tamás Rózsa, CEO of Top Tier Consultants, a strategic consultancy, emphasized that only companies that are able to supply parts for electric vehicles can look to the future with optimism.

The warnings are not without merit, business and political decisions that accelerate the spread of electric propulsion, as well as the loss of the market for purely internal combustion designs, are made one after another.

According to Tamás Rózsa the fate of the Hungarian factories is basically determined by the group-level electrification plans, including Audi under the auspices of VW, Daimler and BMW, which is building a new car plant in Debrecen, Hungary. Suzuki would need a renewal.

It is also true for the Suzuki Esztergom plant that it could be re-tooled for a maximum of a few hundred million euros, but the breakthrough product is still missing from the portfolio of the Japanese brand. The Expert is not worried about domestic factories - PSA-owned Opel producing only petrol-powered engines in Szentgotthárd, is predictable in the medium term - but about the supply chain, which focuses primarily on the current consumer demand side of emobility and not on stricter regulations and finds it risky to build higher volume capacities. "Yet those who are not involved in the supply of electric vehicle parts are pushed out of the market soon. This message didn't seem to go through" -he pointed out.

See the full article:



Index 2020. December 7.

Emobility advances faster than expected

The advancement of electric driving is happening at a faster pace than previously expected. Switching is easier for carmakers and more difficult for suppliers.

Suppliers are focusing mainly on current carbuyer demand and not on tightening regulations. Of these, only those who are able to supply parts for electric vehicles can be optimistic. It is encouraging that the share of Central and Eastern Europe in automotive production has so far increased, and this trend will continue with electrification.

Tamás Rózsa, CEO of Top Tier Consultants, a strategic consultancy, emphasized that only companies that are able to supply parts for electric vehicles can look to the future with optimism.

The warnings are not without merit, business and political decisions that accelerate the spread of electric propulsion, as well as the loss of the market for purely internal combustion designs, are made one after another

- he points out, adding that the fate of Hungarian factories is basically determined by group-level electrification plans.

In this Audi is strong under the auspices of VW, Daimler and BMW, which is building a new car plant in Debrecen, Hungary. Suzuki would need a renewal. It is also true for the Suzuki Esztergom plant that it could be re-tooled for a maximum of a few hundred million euros, but the breakthrough product is still missing from the portfolio of the Japanese brand.

The Expert is not worried about domestic factories - PSA-owned Opel producing only petrol-powered engines in Szentgotthárd, is predictable in the medium term - but about the supply chain, which focuses primarily on the current consumer demand side of emobility and not on stricter regulations and finds it risky to build higher volume capacities.

Yet those who are not involved in the supply of electric vehicle parts are pushed out of the market soon. This message didn't seem to go through

- points out Tamás Rózsa.

See the full article:



Napigazdaság 2020. December 7.

Electric driving is advancing faster than expected.

The advancement of electric driving is happening at a faster pace than previously expected. Switching is easier for carmakers and more difficult for suppliers. This is the assessment of the situation by industry experts, which the Világgazdaság is presenting in its Monday issue.

Tamás Rózsa, CEO of Top Tier Consultants, a strategic consultancy, emphasized that only companies that are able to supply parts for electric vehicles can look to the future with optimism.

The warnings are not without merit, business and political decisions that accelerate the spread of electric propulsion, as well as the loss of the market for purely internal combustion designs, are made one after another

- he points out, adding that the fate of Hungarian factories is basically determined by group-level electrification plans.

In this Audi is strong under the auspices of VW, Daimler and BMW, which is building a new car plant in Debrecen, Hungary. Suzuki would need a renewal. It is also true for the Suzuki Esztergom plant that it could be re-tooled for a maximum of a few hundred million euros, but the breakthrough product is still missing from the portfolio of the Japanese brand.

The Expert is not worried about domestic factories - PSA-owned Opel producing only petrol-powered engines in Szentgotthárd, is predictable in the medium term - but about the supply chain, which focuses primarily on the current consumer demand side of emobility and not on stricter regulations and finds it risky to build higher volume capacities.

Yet those who are not involved in the supply of electric vehicle parts are pushed out of the market soon. This message didn't seem to go through

- points out Tamás Rózsa.

See the full article:



Privátbankár 2020. December 7.

Is it hard to keep up with electric driving?

The advancement of electric driving is happening at a faster pace than previously expected, and the transition is easier for carmakers and more difficult for suppliers, says industry experts in the Világgazdaság.

Suppliers are focusing mainly on current carbuyer demand and not on tightening regulations. Of these, only those who can deliver parts for electric vehicles can be optimistic. It is encouraging that the share of Central and Eastern Europe in automotive production has already risen, and this trend will continue with electrification.

The transition to new technologies, especially the advancement of electric cars, is taking place at a much faster pace than previously expected - József Nyírő, President of the National Association of Hungarian Vehicle Components, told the leaders of automotive companies about this. He stated that the trend should be acknowledged by all Hungarian industry players.

Tamás Rózsa, CEO of the strategic consultancy Top Tier Consultants, emphasized that only companies that are able to supply parts for electric vehicles can look to the future with optimism.

The warnings are not without merit, business and political decisions that accelerate the spread of electric propulsion, as well as the loss of the market for purely internal combustion designs, are made one after another.

According to Tamás Rózsa, the fate of the Hungarian factories is basically determined by the group-level electrification plans, including Audi under the auspices of VW, Daimler and BMW, which is implementing a new unit in Debrecen. Suzuki would already have the reinforcement. It is also true for the Esztergom plant that it could be recalibrated for a maximum of a few hundred million euros, but the breakthrough product is still missing from the portfolio of the Japanese brand. The expert is not worried about domestic factories - PSA-owned production of Opel-only petrol-powered Opel in Szentgotthárd is predictable in the medium term - but about the range of suppliers, who focus primarily on the demand side and not on stricter regulations and risky over-planning. vehicle-related capacities. "Yet anyone who is not involved in the supply of e-car parts will be pushed out of the market. This message seems to have not passed," he pointed out.

See the full article:




Világgazdaság 2020. December 4.

It is early to give up on Opel in Szentgotthárd.

The owner, the French group PSA, recently announced ceasing development of new internal combustion engines. This could also be an ominous omen for the factory in Western Hungary, but in Szentgotthárd they look to the future with particular confidence.

The Szentgotthárd engine plant produces at full steam, Zoltán Kaszás, the factory's spokesman, told Világgazdaság.

The plant will produce the owner’s most important turbo petrol engine, the French PSA Group, in three shifts, and this momentum will continue in the coming period.

Our paper contacted the company about the fact that the CEO of the group behind it, Carlos Tavares, said at a conference at the end of November that they would not invest more money in developing internal combustion engines as both the European Union and China are striving for “cleaner mobility”. The announcement was echoed domestically in the context that the factory on the edge of the western border, which had existed for almost thirty years, is also facing a slow death. Opel Szentgotthárd currently has 800 employees.

According to the unanimous opinion of the automotive industry authorities, internal combustion engines will have a right to exist for many years to come, not only as an independent powertrain, but also in the application of hybrid, ie two-component technology, said Zoltán Kaszás.

In fact, in addition to the advancement of all-electric vehicles (BEVs) in the European market, the share of hybrid electric (HEV) and plug-in hybrid (PHEV) models is also on the rise.

In Germany, which is also a compass in this area, the top consultancy Top Tier Consultants measured that BEV and PHEV drive types together accounted for 15.6 per cent in September 2020, up from just 3.9 per cent last September.

See the full article:



Portfolio 2020. December 3.

Continental is making a huge automotive investment in Hungary

The vitality of the Hungarian economy is shown by the fact that despite the unfavorable news from the world economy, more and more investments are being announced in Hungary every day, emphasized Péter Szijjártó, Minister of Foreign Affairs and Trade, at the investment announcement press conference of Continental Automotive Hungary Kft.

In connection with the current announcement, it is worth recalling the conference of the National Association of Hungarian Vehicle Parts Manufacturers (MAJOSZ) a few weeks ago, where Tamás Rózsa spoke about the recent trend of increased production in Central and Eastern Europe in the automotive industry, while in Western Europe it stagnated or rather declined.

The managing director of Top Tier Consultants added, this trend will continue and Romania and straight behind that Hungary are expected to be the biggest winners of this trend.

In connection with alternative drives, there is an expansion of capacity in Western Europe as well, but this will also trickle down towards large production bases, and Hungary will also be able to benefit a lot from this.

It should also be seen that the focus of production is increasingly on Eastern and Central Europe, new factories are being built here and capacity expansions are also being carried out in this region. All this may lead to the fact that while sooner or later there will be 30-40 percent capacity expansions in the automotive industry in our region, in the West we will only be able to talk about stagnation at best.

See the full article:



Portfolio 2020. November 30.

A crazy transformation is taking place: who will be the winners and losers of the Hungarian car industry.

Last Wednesday, the online webinar of the National Association of Hungarian Vehicle Parts Manufacturers (MAJOSZ) took place, focusing on the situation, challenges and opportunities of the international and domestic automotive industry affected by the corona virus crisis. The transition to new technologies, the advancement of electric cars, which was emphasized by József Nyírő, the president of Majosz, is also taking place at a much faster pace than most people expected before. Tamás Rózsa, CEO of Top Tier Consultants, stated:

The recent market upturn was supported by temporary measures which increasingly threatens with a "W" shaped recovery

See the full article:



AutoPro 2020. November 29.

Pandemic to continue to shape automotive manufacturing through 2021

The Association of Hungarian Vehicle Component Manufacturers (MAJOSZ) held a webinar on Wednesday under the title “COVID status report in the automotive industry”. Tamás Rózsa, CEO of Top Tier Consultants Kft., gave a presentation on the current status of the automotive manufacturing sector.

Prior to Rózsa’s presentation, József Nyírő, the president of MAJOSZ, offered a short introduction to the latest plans and results of local OEMs in the field of electrification.

He said that car manufacturers are adapting well to environmental standards, and are expected to comply with the European Union’s regulation maximizing CO2 emissions in 95g/km for the year 2020.

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AutoPro 2020. November 25.

The car industry is sure to be determined by the pandemic next year.

A webinar titled COVID Situation Report in the Automotive Industry was organized by MAJOSZ on Wednesday. At the event, Tamás Rózsa, the managing director of Top Tier Consultants Kft., gave a presentation on the current state of the automotive industry.

Prior to Tamás Rózsa's presentation, József Nyírő, President of MAJOSZ, gave an opening speech, in which he briefly presented the electrification plans and results of larger OEMs. He assessed that car manufacturers are still adapting well to environmental standards and are expected to comply with the rule set by the European Union that cars could emit 95 grams of CO2 per kilometer in 2020. However, autopro.hu also reported that in the case of Volkswagen, it may not be possible to keep the quota in full, so the ID.4 model will not be introduced in the United States this year.


W-shape recovery

Tamás Rózsa explained that the crisis caused by the coronavirus epidemic caused a much deeper drop in the number of global vehicle sales compared to the 2008 global economic crisis. At the same time, it is positive that the rebound from the low point is also much faster than at the time of the crisis: while after 2008 it took thirty months, ie two and a half years, for sales to recover, this process has now taken place in six months.

This, in turn, does not mean that we are beyond the crisis. The rapid increase in sales is partly due to one-off, temporary incentives, which is why another smaller decline is to be expected before sales increase again. Based on this, instead of the previously expected V- or U-shaped curve, a W-shaped recovery curve is taking shape.

Top Tier Consultants expects that 17 percent fewer vehicles will be sold globally this year compared to the numbers forecast before the pandemic.

Tamás Rózsa emphasized that analysts are still making fundamentally optimistic forecasts, as they expect a wide-scale vaccination in the first half of 2021, and do not expect the second wave of the pandemic to cause such shutdowns in the automotive industry as in the spring.


Production is less than sales

The pandemic has created an interesting situation by the end of 2020: according to forecasts, a larger decline in production is expected this year than in sales. This can be explained by the depletion of stocks, this anomaly should be eliminated by the automotive industry in 2021.

Globally, vehicle production is expected to decline by 17.7 percent by 2020 compared to 2019, and by 23.5 percent in the European Union. In 2021, the decline could be 7.5 percent globally and 14.5 percent in the EU vs. 2019. The latter estimates can still change a lot, according to Tamás Rózsa, unfortunately in a more negative direction, for example, if the wide-scale vaccination against the coronavirus is delayed, or if the pandemic causes more downtime in the coming months.

Interestingly, Western Europe probably reached the peak of vehicle production as early as 2017, and it is expected that fewer cars will be produced there for a long time as then. Central and Eastern Europe, and thus Hungary, can still reach new heights, the trends show that production can move to this region.


There will be no cheap electric cars, but petrol prices may become more expensive

Tamás Rózsa said at the end of the presentation that the availability of electric cars is a complex issue. With incentives from individual countries, it may of course be more reasonable to buy an electric car, but for now, the switch is only worth it if we drive cars a lot. He mentioned taxis as an example, where it is already better to buy an electric car today due to its high usage.

In the future, however, it can be expected that the price of smaller (1.2, 1.4 and 1.6) petrol cars will rise, approaching the price of electric models. This is partly due to environmental standards and partly due to the fact that OEMs can't afford the practice of selling a model cheaper in Hungary, for example, than in Germany.

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Portfolio 2020. October 30.

After an amazing resurrection, the automotive industry is facing crucial months - Dozens of Hungarian suppliers are in danger of bankruptcy.

In the article below, based on the latest data and forecasts from Top Tier Consultants, I assess the short- and medium-term prospects of the automotive industry and the impact of the coronavirus pandemic on the prospects of the Hungarian supplier base. In our opinion, a faster-than-expected surge in global car sales could have a beneficial effect on the performance of the domestic automotive industry. However, it should also be empasized, that several negative risks can be identified in the market that increase the likelihood of a W-shaped recovery. The occurrence of the latter scenario would be a particular problem for the dozens of smaller domestic automotive suppliers that are already at risk of bankruptcy.

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Világgazdaság 2020. October 29.

The most risky SMEs were identified

Even in the shadow of the coronavirus crisis in the third quarter, the automotive industry performed unexpectedly well. The sector is proving to be more resilient domestically than in Europe, but even so, one in five SME-sized suppliers is at risk.

Of the 250 largest domestic automotive suppliers, 141 are small and medium-sized enterprises (SMEs), 30 of which are threatened by the coronavirus crisis, said Tamás Rózsa, Managing Director of Top-Tier-Consultants, a strategic consultancy. He said that

the companies identified employ about seven thousand people, most of them are Hungarian-owned, and their total turnover reaches HUF 153 billion.

The approximate turnover of the entire supplier base is about HUF 8 trillion, of which SMEs account for about 900 billion, and their share in employment within the sector is 20%. "Apparently, the performance of companies under HUF 5 billion is weaker," the expert pointed out.

He also talked about the fact that the decline in Hungarian automotive production this year is expected to be a few percentage points less than that of the EU:

The annual decline in 2020 could be around 20 percent, compared to 24 percent in Europe.

Both forecasts are more favorable than the forecasts released in the spring, which were about 25 and 28 percent, respectively. The reason for the improving trend, that the sector performed unexpectedly well in the third quarter, practically returned to the level of the same period last year. Tamás Rózsa warned that even then the glass is still rather half-empty, as the favorable trend is mainly due to one-off effects that will run out by 2021. Such as various cash for clunkers schemes, capital market liquidity, or the positive effect of deferred purchases for now.

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HVG 2020. October 29.

Carmakers will endure the crisis, but their suppliers are getting into more and more trouble.

The existence of thirty Hungarian automotive suppliers is threatened by the crisis, especially those with below-average turnover.


Although the Hungarian automotive industry seems to be impact-resistant so far, many small and medium-sized automotive suppliers are vulnerable, writes Világgazdaság. Tamás Rózsa, managing director of the strategic consultancy Top-Tier-Consultants, told the newspaper:

141 of the 250 largest Hungarian automotive suppliers are small or medium-sized, 30 of which are threatened by the crisis.

Together, these companies employ roughly seven thousand people. The performance of companies with a turnover of less than HUF 5 billion have become weaker - the industry average is HUF 8 billion.

The expert sees downside risk to 2021, at the European level that year will be 15-19 percent weaker than in 2019, and only in 2022-2023 can the level of production fully recover to the previous level.

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AutoPro 2020. June 26.

This is how Hungarian suppliers can survive the crisis.

The leaders of several important Hungarian suppliers took part in the online conference organized by Portfolio.hu on June 25. They agreed on the importance of developments and investments, as well as on the state’s good and quick response to the crisis. While rethinking supply chains would be necessary, almost no one considers it realistic for major changes to take place in the area.

The Conference on "Era Change in Suppliers at the Time of the Coronavirus" examined the effects of the coronavirus on the automotive industry specifically focused on suppliers. How can these companies survive, what were the biggest challenges, how much did they suffer from the crisis? At the, currently almost always, online conference, we first got an overview of the effects of the coronavirus, and then the leaders of some domestic suppliers evaluated the situation.

After the introduction by Csaba Kilián, Secretary General of the Hungarian Automotive Industry Association,

Tamás Rózsa, Director of Top Tier Consultants, started the conference.

He explained that the number of vehicle sales is constantly increasing, the economic crisis of 2008-2009 was a more serious break on the curve, and that is very little compared to 2020 fall of output due to the crisis caused by the pandemic.

Tamás Rózsa pointed out that the impact of the crisis is regionally different: the situation in South America and India is the worst, but Europe has also experienced a deep crisis, vehicle sales in the European Union fell by 79 percent in April, which is extremely bad even in this situation.

The downturn is severe in the United States, but as in Europe, it was true in April that April was the low point, May was already slightly improving, and June is expected to be even better.

In China, the trends are different, with early year decline, stagnating in April and May already rising by 8 percent. It does matter when, how and to what level of industry output we get out of the crisis.

In China, vehicle sales are returning to even higher levels than previously expected, with a shift away from public transport and with many first time car buyers entering the market. As a result, the crisis curve may be V-shaped in China, but experts in Europe and the United States do not expect this, and due to the spread of the home office, post-return levels will be lower and sales are expected to increase only in the longer term. Here the U-shaped curve will be typical.

Tamás Rózsa said that according to Top Tier Consultants' expectations, the global vehicle market will return to 2019. levels by 2022-2023.

however, it can be reassuring that while the forecasts for 2020 were worse month after month until May, the declining forecast trend came to a halt in June, experts are already more optimistic.

Expectations are optimistic: Forecasts do not really anticipate that there could be a second wave of the COVID-19 pandemic in the Fall, which is one of the negative risks of the forecasts, while possible additional state subsidies will be a positive risk.

Top Tier Consultants in Europe expects a 28 percent decline this year and a 16.8 percent decline next year. This is a worse indicator than a V-curve, but better than a U-shape.

According to Rózsa, suppliers must rely on three stakeholders: Customers, Shareholders and Investors. They need to be convinced that the company is stable. Elements of this could include emphasizing “good financials in 2019,” highlighting how they can emerge from the crisis by describing a U-curve, and developing a new, crisis-proof strategy for the future.

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Portfolio 2020. June 25.

The Hungarian car industry needs three things to emerge successfully from the coronavirus crisis.

There is a unique opportunity due to the crisis, in an unusual way in the automotive industry, Hungarian suppliers can attack both their Western European and Asian competitors, said Tamás Rózsa at the "Automotive 2020" online conference. The managing director of Top Tier Consultants added that the market can be over-performed only in case a particular Hungarian supplier actually survives the crisis. And the key to survival is in three hands: the trust of Customers, Investors and Lenders alike must be won, which is not a given but a result of proactive hard work.

Tamás Rózsa, who pointed out at the very beginning of his presentation, can see the long-term growing global vehicle sales in the past, which was only broken by the crisis 10 years ago and the current coronavirus crisis. However, the big downturn in 2020 speaks for itself, much larger than it did 10 years ago. He added, regional differences are significant: China is in a promising “V” -shaped rebound after the February lows, partly due to the fact that car factories in the Asian country idled only for less than 3 weeks. In Europe, on the other hand, the plants stood still for an average of 7 weeks and they still currently only produce at 40% capacity, typically in a one-shift work schedule.

According to an expert from Top Tier Consultants, the current deep dive of sales raises two very important questions:

  1. how long it will take for the 2019 production level to return

  2. what level will it return to

It’s worth standing on the ground of realities, there’s no chance of a “V-shaped” recovery in Europe anymore, this ship has sailed.

It is much more likely that a recovery will be somewhere between “V” and “U” shape as car buying habits are affected differently in each region by the coronavirus crisis.

- stated Tamás Rózsa.

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Világgazdaság 2020. June 22.

In the medium term, the domestic car industry could emerge as a winner

As part of the reorganization caused by the pandemic, domestic suppliers could gain business from China, Japan and Western Europe. The automotive industry on the continent has already moved towards the east, now it may accelerate.

The Hungarian Automotive Industry decline could stay below the expected decline of the automotive industry in Europe this year. While in Europe the sales forecast is minus 28 percent compared to 2019, the Hungarian forecast is 24-25 percent - Tamás Rózsa, the managing director of the strategic consultancy Top Tier Consultants, told the Világgazdaság. As he said, there are negative risks to the forecast, if there will be a second wave of the coronavirus pandemic, but the cash for clunkers programs are already outlined as a positive uncertainty. The smaller domestic decline is also explained by the fact that a large amount of spare parts is manufactured in Hungary, which was not affected by the temporary shutdown of carmakers. "This has been survivable so far, or at least the problem seems smaller than in the West."

According to the expert, there has been no wave of bankruptcies in the domestic sector and larger redundancies can also be avoided by introducing reduced working hours. This, if not easy, can be achieved by many businesses. Of the Top-500 suppliers, 20-30 could be at risk and up to 5-10,000 jobs could be lost.

This can be even regarded as a natural process, it cannot be expected that the current crisis will have no effect at all.

At the same time, Tamás Rózsa drew attention to the fact that at least 90 percent of domestic automotive suppliers are able to receive relocations from other markets. Although this process may be constrained by the lack of live customer contacts, the number of employees employed by the top 500 today could even increase to 170-180 thousand by 2022-2023. New orders can be placed not only between the domestic supplier and the foreign Customer, but also multinational parent to domestic daughter as well. Hungary's location is particularly favorable for intra-firm relocations. Domestic suppliers are part of the European supply chain, so high value-density components can be transported economically anywhere, but seats for example, only within 500 kilometers and metal components within 1,000 kilometers of production. As with the 2008-2009 recession, the question now arises as to where to manufacture. The answer is where there is a sustainable cost advantage. In the case of Hungary, this is given, so is along the Turkish-Polish axis, so there is fierce competition for projects in this zone.

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Portfolio 2020. June 19.

We anticipate that European car production will crumble, but the star of Hungary may shine brighter

In the article below, based on the latest data and forecasts from Top Tier Consultants, I assess the short- and medium-term prospects of the automotive industry and the impact of the coronavirus pandemic on the prospects of the Hungarian supplier base. In our opinion, domestic suppliers may emerge stronger from the coronavirus crisis, but it is important to emphasize that this is not a given, but an opportunity for forward-thinking and therefore hard-working companies.

A characteristic feature of short-term forecasts is that while the fundamentals of the present are deteriorating, so are short-term forecasts. In the context of the coronavirus crisis, analyst consensus on vehicle sales forecast for 2020 kept deteriorating each month: it was lower in March than forecasts made in February, April forecasts were lower than that of in March, May forecasts than April forecasts.

AT THE SAME TIME IN JUNE, THE FORECASTS ARE NO LONGER DETERIORATING, IT CAN BE SAID, GLOBAL VEHICLE SALES WILL DECREASE FROM 91 MILLION IN 2019 TO 70 MILLION BY 2020.

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Portfolio 2020. May 6.

Breaking: The construction of BMW's Hungarian factory is postponed!

Due to the coronavirus pandemic and related restrictive measures, the sales of the BMW Group have fallen sharply, and the pandemic will limit the operation of the entire automotive industry for some time to come, so BMW aims to maintain a strong liquidity position by reviewing all projects and investments, product development. The company is implementing projects in response to expected demand, so in the current situation, the construction of the BMW plant in Debrecen has been postponed for a year.

An article on the topic was published in the Portfolio in mid-April, when Tamás Rózsa from Top Tier Consultants wrote that the sudden appearance and rapid spread of the coronavirus arrived to the global automotive industry that was already inn a challenging period. Dramatically falling car sales, disrupted supply chains, and keeping workers healthy have created an unprecedented situation in the industry. In addition, the possible recovery scenarios do not give cause for optimism in the short term. Despite that, there is no need to fear a wave of bankruptcies and many tens of thousands of redundancies in the Hungarian car industry, but the fact is that

WE CAN ALMOST SAY FOR SURE THAT THE BMW DEBRECEN PLANT WILL NOT BE BUILT IN THE PLANNED FORM AND TIMING, ACCORDING TO TOP TIER CONSULTANTS.

The currently available production capacities assume a delay of at least three years and the investment will have to be won again based on the market conditions at the time, Tamás Rózsa wrote at the time.

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Napigazdaság 2020. May 6.

Breaking: The construction of BMW's Hungarian factory is postponed!

Tight cost control.

BMW today released its quarterly report, in which management has already written about the introduction of strong cost control, because the priority is to preserve liquidity, which is why it would save on R&D costs and not on investments.

In the first quarter of this year, BMW kept R&D spending at the same level, this line shows only a 1.1 percent decrease, BMW spent 1.38 billion euros, but investments were cut by almost a third, Capex decreased by 31 percent from 1 billion euros to EUR 687 million.

Given the current situation, certain projects will either be suspended or further reviewed. We will reduce investment costs from 5.7 billion euros last year to less than 4 billion euros in 2020, said Nicolas Peter, a member of the board.

This was already the foreshadowing of the announcement made by the group’s CFO this morning when he talked about postponing the construction of the BMW plant in Debrecen because it would reduce investment costs.

Industry experts have already warned

An article on the topic which was published in the Portfolio mid-April, then by Tamás Rózsa of Top Tier Consultants

wrote that the terribly difficult situation of the sudden emergence and rapid spread of the coronavirus found the global automotive industry already in challenging period. Dramatically falling car sales, disrupted supply chains and preserving workers ’health have created an unprecedented situation in the industry. In addition, the possible recovery scenarios do not give rise to optimism in the short term. Despite that, there is no need to fear a wave of bankruptcies and many tens of thousands of redundancies in the Hungarian car industry, but the fact is that

We can almost say for sure that the BMW Debrecen plant will not be built in the planned form and timing

- expects Top Tier Consultants

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Portfolio 2020. April 12.

The coronavirus puts the Hungarian car industry in a difficult position - The construction of the BMW plant could face years of delay.

The sudden appearance and rapid spread of the coronavirus arrived to the global automotive industry that was already inn a challenging period. Dramatically falling car sales, disrupted supply chains, and keeping workers healthy have created an unprecedented situation in the industry. In addition, the possible recovery scenarios do not give cause for optimism in the short term. Despite that, there is no need to fear a wave of bankruptcies and many tens of thousands of redundancies in the Hungarian car industry, but the fact is that

We can almost say for sure that the BMW Debrecen plant will not be built in the planned form and timing, according to Top Tier Consultants

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Napigazdaság 2020. April 12.

The coronavirus puts the Hungarian automotive industry in a difficult position - The construction of the BMW plant could face years of delay! - Portfolio

Tamás Rózsa will take part in the Automotive Industry 2020 conference again this year, which will be held on 9 June.

Tickets can be purchased by clicking on the link below:

After 10 years of growth the global automotive industry cycle entered into decline in 2018. Among the developed markets, North American vehicle sales have declined minimally over the past 2 years and were still at a high level by historical standards, while Europe continued to grow slightly still in 2019 despite a very high base. The global decline was caused by China, which has become the world’s largest market, but declined 3% in 2018 and over 5% in 2019. In addition, other major emerging markets such as India, Argentina within South America, and Russia also weakened for different reasons.

These trends have been reinforced to an unprecedented extent by the unexpected emergence and rapid global spread of the new coronavirus, with sales falling by 85-90% under lockdown restrictions.

The situation is exacerbated by the fact that European vehicle production has also developed production capacity for the net export of around 2.5 million cars. However, the demand for these cars built up in previous years may largely disappear, mainly because import of new cars in the two main export markets, the United States and China, may decline dramatically. Of course, the Hungarian members of the tightly integrated supply chain are also feeling the effects of this, as they already experienced a decrease in production volume in 2019.

If that were not enough, the industry would be seriously threatened by the prospect of a fine starting in 2020-21, generated by the tightening of European carbon regulation. The decades-long decline in CO2 emissions is tied to milestones by European regulation and reduced by roughly 25% every five years. This was planned for by carmakers by fine tuning and electrifying internal combustion engines, but several unexpected factors intervened.

First, the diesel scandal has led to the rise of higher-carbon emitting petrol cars, and the combined effect of increased demand for higher-fuel-consuming SUV's could not be offset by advances in internal combustion technology.

Instead of the expected decline, CO2 emissions of vehicles by 2019 had already increased in the third year in a row. This trend can only be offset by the large-scale electrification of cars. Top Tier Consultants predicts that the combined share of compliant - externally-charged - electric and hybrid cars should be 53% by 2030, but this pushes the boundaries of reality due to product acceptance and low development of charging infrastructure.

If the acceptance of electric cars does not increase dramatically in 2020-21, or perhaps remain at the current level, it would impose a fine of € 160 billion on manufacturers cumulative until 2025. With the global car industry still having had the highest profitability to date at around € 40 billion, and as European manufacturers have already spent over € 150 billion on vehicle electrification, this fine would mean the bankruptcy of a major European carmaker by 2025 and this is not even taking into account the effects of the coronavirus.


There are several possible scenarios for market recovery.

The dramatic decline in automotive manufacturing output in Europe could reach its lowest point in April 2020, while China will provide a template for recovery time which we forecast to be summer 2020 there. This, of course, depends on few factors such as health factors like the success to curb the virus and the possible seasonality of the pandemic; and economic factors such as the restoration of consumer confidence and the success of stimulus measures. In any case, it is a fact that 90% of car factories in China today are already up and produce, which gives some optimism.

We also have a worse case scenario in which the recovery would only take place after the third quarter.

Unfortunately, we do not expect a more positive scenario, as even with the best recovery in health and consumer confidence, the global logistics sector will have to recover itself. At present, almost half of maritime transport capacity is paralyzed, with roughly 45% of air freight being transported in the belly of passenger aircraft, and that has come to a complete standstill in the affected areas and, last but not least, truck drivers are scarce too (already coming into the crisis in Europe).


The coronavirus will have a painful effect on the Hungarian automotive industry, but it will also create opportunities

In view of the above findings, we must stand on the ground of realities and accept that the BMW plant in Debrecen will not be built in the planned form and timing.

The current unused production capacities assume a delay of at least three years and the investment will have to be re-won based on the market conditions at the time. The expansion of Mercedes in Kecskemét is also only slightly better due to the existing well-functioning capacities.

With regard to the situation in Hungary, it is important to emphasize that we do not expect a series of bankruptcies at suppliers as long as car factories still operate, and fortunately there is no visible sign of such turn of events.

Parts deliveries are parts of a specific vehicle that are still needed and not easy to replace. If things turn to worse and there were no other options, of course, supplier capacities could be saved by an OEM that could chose between an Italian / French / German parts factory with a similar capacity and profile, or a Hungarian one with a structural cost advantage. In this situation, in addition to the management of the company, the state and financiers will have a big role to play in convincing Customers about the rescue. We estimate that 100 of the 500 largest suppliers in Hungary are healthy enough that they can survive the crisis from their own resources.

The remaining 400 need help, but 370-380 of them can be saved and roughly 20-30 companies will go bankrupt whose business model has only been made sustainable by the support system they receive.

It is also important to talk about the fact that in 2020, up to 40,000 of the 150,000 jobs in the 500 largest Hungarian suppliers may become temporarily redundant. On the one hand, because some of the jobs depend directly on the operation of the production line, which is currently idle. On the other hand, because, for example, the work in the field of finance and accounting can be done largely from home, but if there is less economic activity and less of the receipts to be filed, the employees of this field are also underemployed. In addition to obvious liquidity and job retention problems, the structural issue here is also what to expect in the new post-crisis supplier relationship system. Our view is that if companies, the state and financiers do a good job, out of the 150,000 jobs, the 40,000 mentioned above will not become redundant, only 5-10,000 will be lost due to the non-viability of that business. At the same time, the amount of jobs that will be added to the capacity due to relocations to Hungary during the crisis must be added to the balance.

We put this job expansion at 20-30 thousand by the end of 2023, meaning that if we do a good job, the balance of jobs could be even positive.

It should also be seen that Hungary has a structural cost advantage, so domestic suppliers may remain viable in the long run, and the sector may even strengthen. An obvious precondition is that only the suppliers who actually survive the crisis will be strengthened and will be able to convince the carmakers, their customers, their owners and their financiers. Firms that do not have at least three months of liquidity will have to make immediate and serious decisions. According to a survey by Top Tier Consultants, barely 20% of Hungarian-owned suppliers have this liquidity. The remaining 80% requires external funding to provide liquidity, in addition to immediate cash retention measures. In addition to short-term measures, all suppliers need to rethink the standards of new operations after the crisis, both strategically (product range, customer diversification, pricing, organizational flexibility and speed, etc.) and operationally (increasing efficiency and performance is essential). However, the creation of a strategy is also related to liquidity, because in our experience, a 20% with sufficient liquidity also has a strategy for after the crisis.

Just as we are at the beginning of the pandemic, the economic impact is even more difficult to predict at this moment, it can vary from week to week. For this reason, it is also important to stress that Top Tier Consultants will also update its forecasts frequently, which may change over time to take account of new developments.

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2019. November 29.

Automotive industry faces turbulent period


Domestic experts, analysts and representatives of the automotive sector agree that the situation in the automotive industry is not rosy either domestically or globally. But there is something to hope for and there is room to move forward: a skilled workforce and creative Hungarian engineers, as well as knowledge sharing and collaboration, can improve the situation.

The Hungarians on the Market Club, founded almost ten years ago, aims to strengthen the cohesion of the dominant middle market Hungarian entrepreneurs. The members of the community are managers and owners of domestic medium-sized companies with significant economic experience and business knowledge behind them, and who are looking for inspiration, business relationships and experience that support their personal and corporate success. With their regular gatherings, the Club aims to provide a forum for discussion among entrepreneurs.

Most recently, the topic of challenges and opportunities for the automotive industry and suppliers was discussed at the club’s fall event, which was attended by more than 100 middle and senior executives. At the event, organized jointly with the National Association of Hungarian Vehicle Parts Manufacturers (MAJOSZ), various representatives and analysts of the automotive industry shared their observations regarding the domestic situation, problems and possible solutions.


Slowing growth and streamlined developments

As a vehicle supplier, Dr. Tamás Büttner, Managing Director of Büttner & Co., has been feeling hesitation the German automotive industry and its leaders about the future in the past year, but is confident that as soon as the major players make the necessary decisions, the stagnation will end and as soon as in the second quarter of next year, the industry can gain new momentum.

Meanwhile, technologies are also changing, with increasing emphasis on, for example, shared mobility, self-driving vehicles and electrification, all of which have a significant impact on industry internationally and domestically, as Gábor Ormosy, CEO of AutoWallis Plc., Pointed out. A good example of this is that the conventional internal combustion engine has 149 moving parts, while the electric car has only 24. The market for mechanical moving parts is € 400 billion, and 70 percent of the domestic supplier base is affected,

According to Tamás Rózsa, CEO of Top Tier Consultants, who spoke at the event, the rise of electric vehicles is also widespread in Hungary.

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