Budapest Business Journal 3010 by Business Publishing Services Kft.

VOL. 30. NUMBER 10

MAY 20 – JUNE 2, 2022

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SPECIAL REPORT INSIDE THIS ISSUE

Automotive Skids Under Automotive Slow Industry Output COVID, the shortage of microchips, war in Ukraine, and sputtering supply chains have held back Hungary’s automotive industry, the main engine of the national economy, in turn weighing on the industrial output of the country. 13

Second-hand is the New New According to data published by second-hand car online sales portal hasznaltauto.hu, the price of used cars has been rising steadily in Hungary since Q1 2020, driven by a shortage of new cars entering the market and fewer older vehicles from feeder markets like Germany. 18

Ciao, Ungheria!

SOCIALITE

Celebrating Another Hungarian Record Store Day Budapest vinyl collectors like our very own David Holzer have already enjoyed one official Record Store Day this year, back in April, but they have another to look forward to on June 18, he reports. 22

NEWS

Q1 a Stand out, but Slowdown is Likely Exceeding expectations, the Hungarian industry grew by an unadjusted 8.2% year-onyear in the first quarter of 2022. However, analysts warn a slowdown is likely from the second quarter on. 3

BUSINESS

In an exclusive interview, Fabiola Attorri, the Italian CEO of Mercedes-Benz Hungária Kft., talks about gender and diversity, sustainability, and her plans for the German luxury marque in Hungary.17 BUSINESS

Fast-growing Starschema Aims to Double Staff, Conquer CEE Data company Starschema was bought this spring by Indian multinational HCL Technologies. Co-founder Tamás Földi talks about the firm’s rapid growth to date and its future plans. 9

2|1

News

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Budapest Business Journal | May 20 – June 2, 2022

IMPRESSUM

THE EDITOR SAYS

HUNGARY GETS ON ITS BIKE IN RIDE TO THE TOP

EDITOR-IN-CHIEF: Robin Marshall EDITORIAL CONTRIBUTORS: Balázs Barabás, Zsófia

Czifra, Kester Eddy, Bence Gaál, David Holzer, Christian Keszthelyi, Gary J. Morrell, Nicholas Pongratz, Gergely Sebestyén, Robert Smyth. LISTS: BBJ Research (research@bbj.hu)

We were recalling in the editorial office that old Hungarian joke about Kádár-era delays in the command economy. Józsi bácsi has put down his deposit on a new Trabant and is told “Congratulations, it will be delivered in five years’ time!” Józsi looks a little concerned. “Could you make it in the afternoon? I have just booked the plumber for the morning.” A five year wait for a new car is, thankfully, a thing of the past. Even my dream car, the very British Morgan Plus Four, which is hand built around an ash frame and used to have a multiple year waiting lists, is typically yours after between six and 12 months, on average, according to the company website. But waiting times for more mass-produced vehicles have certainly been growing longer in recent months. A triple whammy of microchip shortages, supply chains disrupted by COVID shutdowns (Shanghai, the world’s biggest port and China’s financial capital is only now beginning a phased reopening after six weeks of lockdown), and the war in Ukraine have combined to make it pretty hard to get what you want when you want it, at least at the mass market level. As our article on page 18 points out, the wait for a Skoda Octavia (other makes and models are available), a typical company car, now routinely takes 16-18 months to be shipped. That is one of the reasons why what we used to call the used car market (it is probably something like “pre-loved” nowadays) has exploded. These are

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challenging times to be in the automotive business, something our newly formed government will presumably be keeping a somewhat anxious eye on, given the importance of the sector to the Hungarian economy. That Hungary has been a good investment destination for automakers is not news, nor is the fact that the country has been able to ride the electromobility wave so adeptly that it has become a European stronghold for battery production. Its pedal-power is, perhaps, less well known, but it was not by accident that the Grande Partenza (Grand Departure) of the Giro d’Italia was brought to Budapest this month. According to Eurostat, Hungary ranks 13 in the EU regarding the number of bicycles manufactured, with tried and true Hungarian brands like Csepel now slugging it out with newer Magyar names like Neuzer, Gepida, and Accell Hunland. Taiwan-based Giant, the world’s largest bike producer, only has two factories in Europe, and one of those opened in Gyöngyös (80 km northeast of Budapest) with a EUR 48 mln investment in 2019. It is ramping up toward a target of one million units manufactured annually in a few years. The goal for Hungary is equally ambitious: it is targeting a top five continental position as a bicycle maker. It’s time to get pedaling. Robin Marshall Editor-in-chief

Why Support the BBJ? • Independence. The BBJ’s journalism is dedicated to reporting fact, not politics, and isn’t reliant on advertising from the government of the day, whoever that might be.

• Crisis Management. We have all lived through a once-in-a-century pandemic. But we also face an existential threat through climate change and operate in a period where disruptive technologies offer threats and opportunities. Now, more than ever, factual business reporting is vital to good decision-making. For more information visit budapestbusinessjournal.com

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THEN & NOW

Veronika Harcsa sings at the Memorial Day Concert in the Fiumei út cemetery in Budapest on the evening of Saturday, May 14, the Day of Remembrance. In the black and white image from the Fortepan public archive, Louis Armstrong plays in Hungary on June 9, 1965.

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Budapest Business Journal | May 20 – June 2, 2022

News macroscope •

1st Quarter Performance Stands out, but Slowdown is Likely

Exceeding analysts’ expectations, the Hungarian industry grew by an unadjusted 8.2% on a year-on-year basis in the first quarter of 2022. While all sectors contributed to the growth, a low base effect had a significant role in the increase. A slowdown is likely to come from the second quarter on.

Change in Gross Domestic Product in Hungary 2010-2022 (Q1)

Annual economic growth rate*

Crude Boost

Within the industry figures, the KSH also highlighted crude oil refining, which could be explained partly by the growing volume and partly by the relatively cheap purchase price, Regős noted. As a result of better-than-expected growth, the annual expansion rate may be higher and might exceed 5%. In the coming quarters, it will become apparent to what extent the damage caused by war and inflation will hold back economic growth. At the same time, due to the favorable data, the budget revenues may turn out better than expected, which will help achieve this year’s deficit target, he emphasized. Although the first-quarter data was a positive surprise and made several analysts upgrade their annual growth projection, the European Commission lowered its forecast

Quarterly change in GDP*

for

2022

*Seasonally and calendar adjusted and balanced data

Source:

ZSÓFIA CZIFRA

Adjusted for the calendar year and other effects, GDP rose by 8% in the first three months of the year; according to raw data, the increase was 8.2%. In a quarteron-quarter comparison, GDP climbed a seasonal and calendar year-adjusted 2.1%. The Central Statistical Office (KSH) said that practically all branches of the national economy contributed to the expansion, but industry and market services were at the fore. Growth was also significant in food and drink production, crude refining, and electrical equipment manufacturing, as well as in commerce, commercial accommodations, catering, and logistics, the data shows. Gergely Suppan, the chief analyst at Magyar Bankholding, said that the firstquarter GDP growth was driven by the strong performance of the last quarter of 2021 and also by robust sector growth in the quarter. The very low base also accelerated

Q1 growth.

Thanks to higher-than-expected figures, it is possible that the bank’s experts will slightly

Gábor Regős, head of the macroeconomic unit at the Századvég Gazdaságkutató Zrt., stated that economic growth in the first quarter was significantly higher than expected and was particularly dynamic. Retail sales, driven by wage increases and government transfers, and lowstarting tourism due to last year’s coronavirus restrictions, played a role in the growth of market services.

improve their growth forecast for this year to 5.9%, he said. Bankholding analysts expect a slowdown in the coming quarters, with risks posed by supply chain issues and a shortage of raw materials and commodities due to the war in Ukraine and the related sanctions, rising costs and lending rates, and declining purchasing power, mainly due to soaring inflation. The most significant economic risk would be an oil and gas embargo. However, Suppan and his colleagues do not expect this to be a factor this year, as negotiations should result in allowing Hungary some delay in joining the embargo.

‘Bumpy Road’

According to Dávid Németh, head analyst at K&H Bank, the Hungarian economy had a flying start, but “there is a bumpy road ahead.” GDP growth in the first quarter was partly driven by base effects, industry and services, and soaring household consumption, he said. He noted that the war could slow down the growth in the following quarters.

According to Németh, this year’s growth is expected to reach 4.8% on an annual basis. Orsolya Nyeste, the chief macroeconomic analyst at Erste Bank, recalled that previously published monthly production data had already shown that the industry had proved relatively resilient to supply tensions and that the sector had made a positive contribution to growth. Meanwhile, continued wage outflows and accelerating domestic consumption have supported the performance of services. The short-term outlook, however, is unfavorable. She warned that the coming quarters could bring a gradual slowdown in GDP growth. Despite the deteriorating outlook, strong economic spillovers from last year and high first-quarter performance could boost annual economic growth to somewhere between 4% and 5% this year, she estimates. Erste Bank’s current forecast

4.3%.

However, a lot depends on when the war will end and how quickly the still subdued external demand recovers, Nyeste said.

for Hungary and for the entire European Union. According to the EC spring forecast for Hungary, GDP will grow by 3.6% this year. In its previous forecast, it put the figure at 5.4%. As for 2023, growth is expected to slow further to 2.6%. The expectation is driven by the EU’s forecast for higher import prices, world trade turmoil, greater uncertainty and rising risk premia, all of which are holding back growth, contributing to rising inflation, and worsening the external balance. Inflation in Hungary will increase from 5.2% in 2021 to 9% in 2022 before declining to 4.1% in 2023. The previous EC forecast indicated a 5.4% inflation for 2022 and 3.6% for 2023.

Numbers to Watch in the Coming Weeks On May 26, KSH will publish April’s labor market data, followed by the first quarter investment figures on May 30. The second estimate of the first-quarter GDP data will be released on June 1.

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News

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Budapest Business Journal | May 20 – June 2, 2022

Hungary, EC at Odds Over Russian oil Embargo European Commission President Ursula von der Leyen told the European Parliament on May 4 that it would institute a “complete import ban on all Russian oil, seaborne and pipeline, crude and refined.” That would involve a phase-out of Russian crude “within six months” and refined products by the end of the year and was a consequence of Russia’s invasion of Ukraine and the resulting energy security implications, she said. NICHOLAS PONGRATZ

The proposal was rejected out of hand by the Hungarian government’s international spokesman Zoltán Kovács on the BBC and Minister of Foreign Affairs and Trade Péter Szijjártó on his Facebook page. After consultation with industry leaders, cabinet

Ukraine

Crisis

Roundup

Assistance Package

Meanwhile, Szijjártó outlined a EUR 37 million assistance package Hungary is offering Ukraine at a conference in Warsaw on May 5. In addition to the construction of a school and a hospital in or near Kyiv, the five-part package will include mobile homes delivered to the west of Ukraine for internally displaced refugees, scholarships to Ukrainian students who wish to continue their university studies in Hungary, treating wounded Ukrainian soldiers in Hungarian hospitals, and providing for the care of 130 children in hospitals. According to a representative study by the Kopp Mária Institute for Population and Families, one in three Hungarians have assisted refugees from Ukraine, some 58% of whom provided donations, 40% food, and 39% other donations. Nearly one-fifth of the respondents who provided assistance also volunteered to help the refugees. Anikó Lévai, wife of Prime Minister Viktor Orbán and Goodwill Additionally, Japan’s Suzuki group Ambassador of the Ecumenical Relief Organization, and László Lehel, donated EUR 1 million in cash to support president and CEO of the Ecumenical Relief Organization, at the refugees from Ukraine through the Ecumenical Relief Organization’s National Center in Budapest on May United Nations High Commissioner for 13. The World Relief Organisation and church aid organization Finn Refugees, according to an announcement Church Aid signed a cooperation agreement at the National Center, from Magyar Suzuki. The local unit attended by Anikó Lévai. Photo by Silárd Kosticsák / MTI is distributing EUR 150,000 of the amount and will donate EUR 60,000 to UNICEF Hungary, EUR 50,000 to the members, and top advisors, Prime that von der Leyen had been informed Hungarian Red Cross, and EUR 40,000 Minister Viktor Orbán agreed on May “in detail” of the problems that the to the Hungarian Charity Service of the 6 that the proposed embargo was proposed sanctions would cause Order of Malta. Magyar Suzuki earlier unacceptable, calling it the “equivalent Hungary. “We asked for these problems offered six Suzuki Vitara SUVs to charity of dropping a nuclear bomb on the to be weighed,” he added. organizations bringing aid to refugees Hungarian economy.” Szijjártó later said, on May 11, along Hungary’s border with Ukraine. In addition to speaking with French that Hungary would push for an Minister of Finance Mihály Varga President Emmanuel Macron (the current exemption of pipeline deliveries from also said that Hungary would share holder of the rotating presidency of the the embargo, noting that a large part some of the EUR 2 billion in resources Council of the European Union) about of Russian oil is delivered to Europe the European Bank for Reconstruction the proposed embargo, Orbán hosted via tanker. Since landlocked Hungary and Development is making available von der Leyen for a working dinner at receives most of its oil via pipeline to ease the impact of the war in Ukraine his office in Budapest’s Castle District from Russia, and its main MOL-owned on neighboring countries, following a on May 9, “to clarify issues related to refinery is technically reliant on meeting with EBRD President Odile sanctions and energy security,” von der Russian crude, switching to new sources Renaud-Basso in Marrakesh on May Leyen tweeted afterward. would require hundreds of millions of 10. Varga added that Hungary would Szijjártó, who was also in attendance euros, while motor fuel prices would be prepared to cooperate with the bank at the meeting, said that “some spike 55-60%, Szijjártó claimed in a in its participation in the post-war progress” had been made, relating post on his Facebook page. reconstruction of Ukraine.

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Budapest Business Journal | May 20 – June 2, 2022

WHO’S NEWS

News | 5

Do you know someone on the move? Send information to news@bbj.hu

DVM Group Announces Arrival of 3 Professionals Construction industry company DVM group has announced the appointment of three experienced professionals to bring additional stability and competitiveness to its administration and sales. Gyöngyvér Budai joined the DVM group team in the spring of 2022 as HR director. She obtained a degree in human resources management in 2008; during her final year in college, she held a fulltime position at Budapest Bank when it was the Hungarian member of GE Money. During the time Budai spent there, she collected significant experience in recruitment and selection, organizational development, and as an internal trainer dealing specifically with leadership development and career management. Supporting the IT field, she also had the opportunity to participate in international projects; following a change in the ownership of the bank, she held a key position in the restructuring of recruitment and performance assessment systems and processes. Budai continued her career at Raiffeisen Bank, where she provided support to nearly 1,000 people. Her main tasks included organizational and leadership development as well as teambuilding. Her tasks at the DVM group include reforming and solidifying HR processes

and systems, leadership training and development, the continuous development of recruitment, and boosting employer presence in the construction industry market. Appointed finance director in March 2022, Tibor Oláh is responsible for handling and controlling the company group’s corporate finances, in addition to ensuring smooth collaboration with partners and relevant service providers. He oversees not only the financial activities of the DVM group but also plays a role in the coordination of process development tasks stemming from the growth of the company group. Oláh has a degree in economics, having completed his studies in Germany in 1993. He started his professional career as an auditor with Deloitte, where he participated in audits of Hungarian subsidiaries of international corporations. Beginning in 2001, he served as financial director at the ELMŰ-ÉMÁSZ Group, responsible for financial, accounting and tax activities, in addition to membership on the supervisory committees of three subsidiaries. He participated in international projects and played a crucial role in introducing integrated business administration systems and a document archival system. He first encountered the construction industry through an Austrian-owned general contracting company. He has

Gyöngyvér Budai

Tibor Oláh

collected a broad range of experiences in different sectors, including pharmaceutical wholesale and the hotel industry. Immediately before joining the DVM group, he served as financial department head at Semmelweis University. András Vissy has joined the group as an account manager. He earned his degree in economics in 2016 at the International Business School (IBS). During his studies, he applied for internships at several Hungarian companies, focusing in each case on the real estate market. In 2015, he joined Arkon Zrt. (today known as Ingatlan.com Zrt.), where he was responsible for sales activity and consulting related to the media surfaces of ingatlan.com and the Iroda.hu group. This provided him with insight into the sales and communications processes of the most prominent Hungarian developers while also establishing a unique network of his own contacts.

András Vissy

In 2020, he joined the team of Epronex Építő Zrt., where he was in charge of sales, business development, and communications tasks. He now holds a complex position at DVM, dealing not only with the development and sales of existing services in fit-out but also being responsible for the company’s client contacts. Speaking of the three appointments, managing partner Tibor Massányi said, “The DVM group is being joined by three very strong individuals. With them, we will be able to advance our strategy for growth further. In our industry, continuous renewal is critical for us to meet the challenges dictated by the market. The company will rely on the results-oriented approach, experiences, and contact networks of our new associates in a number of areas. They will help make it possible to implement innovations in our internal and external processes and channels simultaneously,” he said.

PRESENTED CONTENT

Time to Care: Express Medical Assistance at Doktor24 Multiklinika The Budapest Business Journal speaks with Balázs Sárosi, head of Doktor24 Express, the urgent care unit of the leading local private healthcare provider Doktor24. Sárosi and his professional team of doctors offer instant medical care to walk-in patients at the company’s state-of-the-art Doktor24 Multiklinika in District XI, Budapest. BENCE GAÁL

BBJ: Who should turn to Doktor24 Express?

Balázs Sárosi: We give families peace of mind by offering easy and quick access to professional urgent medical care without long waiting times. We primarily treat walk-in clients with acute health issues, but we are also prepared to assist people who are simply not sure what kind of specialist they should see for a particular problem. Our Western European-trained, Englishspeaking team of ER doctors examine, test, diagnose, and treat clients on the spot. If needed, we can also give direct referrals to 50-plus in-house consultants and specialists within Multiklinika for secondary care. We intend to serve

families, so we also treat kids over the age of one, and we can also refer them to Doktor24’s strong team of pediatric specialists. Our clinic is open beyond regular business hours, from Monday to Friday between 10 a.m. and 8 p.m. Clients can secure a parking spot in our underground car park by phone, and we can also assist those with limited mobility to access our premises from the parking area. Our English-speaking doctors boast decades of experience in ER patient care from Western Europe and maintain a comprehensive knowledge of the U.K.’s NHS protocols. BBJ: What kinds of injuries and illnesses do you treat at the clinic?

BS: We treat a long list of non-lifethreatening medical issues from fever, colds, coughs, minor burns, urinary

anticipate when they will need t o come to us, so no appointments are necessary to visit Doktor24 Express. We guarantee medical attention within 15 minutes from arrival, and a full cycle of treatment is completed within four hours. If the client’s condition requires emergency care in a specialized facility, we will do our best to stabilize their condition and call an ambulance or refer them to the local emergency care department. BBJ: What kind of care do you provide on-site?

Balázs Sárosi problems, allergic symptoms, slight head injuries, strains, sprains, and more. In other words, we cover typical sports injuries, domestic accidents, common illnesses, and conditions that require medical attention but do not require hospitalization. The “we treat” and “we do not treat” lists are available on our website, along with our fair and transparent pricing. Our clients cannot

BS: Clients are treated in their order of arrival, in line with ER triage protocols. Primary care includes triage classification, medication to relieve pain or fever, a preliminary medical examination, and, if necessary, an ECG and targeted emergency ultrasound to make a full assessment. On-site lab tests are also available to rule out certain diseases and conditions such as thromboembolism, myocardial infarction, or severe organ failures. We have a whole arsenal of diagnostic equipment at hand at Multiklinika, with ultrasound, X-ray, and additional laboratory tests. We treat sports and domestic injuries with state-of-the-art bracing and gait support. If necessary, we can administer intravenous infusion treatments and obturation, offer wound management and wound closure (in the vast majority of cases with sutureless closure) and remove foreign bodies.

6|1

News

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Budapest Business Journal | May 20 – June 2, 2022

Significant Industrial Pipeline for 2022 Despite Slow Q1 First-quarter delivery for the Hungarian industrial market has been described as restrained, although the total pipeline for the year, if delivered, could match the record annual level recorded in 2021. 11,500 sqm of space was delivered at Prologis Park Budapest-Sziget II in Q1.

GARY J. MORRELL

Prologis delivered 11,500 sqm of space at its Budapest-Sziget II park and 6,700 sqm in Tatabánya, for a total of more than 18,000 sqm of space in the quarter, according to Cushman & Wakefield. The sizeable new supply and the high proportion of preleases are an indication that developers and tenants are attracted to the industrial market. Total modern industrial stock in the Budapest area stands at approaching three million sqm, according to the Budapest Research Forum (CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL and Robertson Hungary). There are few, if any, logistics buildings with large areas of contiguous industrial space available. Cushman has traced 2.8 million sqm of modern industrial space in the greater Budapest area and another 1.3 million sqm in the countryside. With a total of 4.11 million sqm of space in Hungary, stock per capita is below the Central European average.

“2022 first quarter leasing activity further accelerated, demonstrating continuous positive market sentiment in the industrial sector. Total take-up amounted to 125,000 sqm with an 82% share of net take-up largely represented by buildings currently under construction.” The Czech Republic, for example, has total industrial stock that is rapidly approaching

10 million

square meters across several different logistics hubs, according to Cushman & Wakefield. An additional 1.5 million sqm of space is under construction, predominantly in Brno, Ostrava and Olomouc.

“The new supply has not yet managed to keep pace with the excessive demand, leading to the new record low vacancy rate of 1.6% in the Czech Republic, from which the share of vacant areas in Prague decreased to only 0.7%,” said the consultancy. Slovakia, meanwhile, has around 3.2 million sqm of industrial space across the country, with an overall vacancy rate of 5%. Cushman has traced 407,000 sqm of space under construction, primarily being delivered on a speculative basis.

Regional Heavyweights

In terms of stock, the leading industrial developers in Hungary are Prologis, closely followed by CTP, both regional heavyweights. Behind these come Bilk, Wing, Indotek and the state-owned National Industrial Park Management and Development Company (NIPÜF). Several of these have development strategies across Hungary.

Vacancy is put at 4.2% in greater Budapest compared to around 4% in the regional cities and slightly over 4% for Hungary overall.

Approximately

23%

of the greater Budapest pipeline is preleased, according to Cushman & Wakefield. Demand for the first quarter showed a significant 53% year-on-year increase on Q1 2021. “2022 first quarter leasing activity further accelerated, demonstrating continuous positive market sentiment in the industrial sector,” says the consultancy. “Total take-up amounted to 125,000 sqm with an 82% share of net take-up largely represented by buildings currently under construction,” it adds. “New supply arriving in the market was somewhat restrained, especially compared to the record high numbers of the previous quarter, reaching 166,350 sqm in the Greater Budapest area. The 2022 pipeline, however, is significant, with the forecasted delivery of 407,800 sqm of industrial space,” concludes Cushman & Wakefield.

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PRESENTED CONTENT

Budapest Beach Dining by Krésios & Mák A four-hands dinner experience by two Michelinstarred Italian star chef Giuseppe Iannotti and Hungarian chef János Mizsei will run for four nights only for 40 people on each occasion at SHO BEACH. BENCE GAÁL

Iannotti of the world-renowned two Michelin-starred restaurant Krésios, in the Campania region of southern Italy, and Mizsei of MÁK restaurant are presenting this four-hand dinner series in the sandy bay of the exclusive SHO BEACH from June 6-9. You can book a place as one of the privileged few via the beachdining.hu website. Iannotti is coming to Hungary at the invitation of Sho Beach and Mák.

Together with Mizsei, he is creating a unique series of culinary delicacies, which will provide Hungarian audiences with a memorable experience of contemporary, progressive, fine dining culinary culture. The Italian chef is not yet 40, but his restaurant Krésios already has two Michelin stars, and he has been nominated for the Best Chef Award, which has been honoring the world’s most talented culinary stars every year since 2017. His restaurant is located in his familyowned residence near Naples, in the beautiful Italian town of Telese.

Giuseppe Iannotti (left) and János Mizsei. With a passion for experimenting with extremes, Iannotti brings to life uniquely creative and inspired culinary compositions influenced by different cultures. Mizsei, of the 12-year-old, MÁK restaurant in downtown Budapest, had received numerous professional prizes from a very young age and was only 22 when he was chosen as “Young Chef Talent of the Year” by Dining Guide.

Highly Innovative Cuisine

Using unusual seasonal ingredients, he creates highly innovative cuisine that has resulted in the restaurant receiving a Michelin recommendation every year for 10 years, being named among the best restaurants in Hungary by The New York Times, CNN Travel, and the Budapest Business Journal’s own Fine Restaurants 2022, in addition to being selected as a Top Choice by Lonely Planet. ADVERTISEMENT

News | 7

In MÁK’s approach to cooking techniques and presentation style, diners will discover similarities with Scandinavian cuisine alongside the restaurant’s evident relish for Hungarian culinary traditions and local ingredients. The four-hands dinner series aims to provide guests with the most stunning waterfront ambiance possible to enjoy the culinary creations of these two outstanding European chefs, organizers say. The venue of this culinary event, SHO BEACH, is an exclusive location in Budapest, offering guests quality recreation time with its relaxing, natural atmosphere featuring a sandy beach and crystal-clear water. If the event has to be postponed due to unfavorable weather conditions, the organizers say they will offer guests an alternative date, voucher or refund.

Four-hands Dinners Four-hands dinners, often bringing together two celebrity chefs from very different backgrounds for just one or two nights, have been a culinary trend for a few years now. The Michelin Guide Digital says, “For chefs, these collaborative dinners are invaluable opportunities to broaden their culinary horizon. Many chefs will opt to break out of their comfort zones by teaming up with chefs from a different genre in order to be acquainted with a new set of ingredients, cooking techniques and kitchen challenges.”

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Budapest Business Journal | May 20 – June 2, 2022

Business

Prof Mark Maslin: ‘It’s a life-and-death fight to save the Earth’

Members of the Business Council for Sustainable Development in Hungary were given a no punches pulled assessment of the environmental challenges ahead at the BCSDH Business Breakfast and Forum on May 10. The focus was on its “Time to Transform 2030” program, which aims for systemwide change. GERGELY HERPAI

“Climate change is now a matter of fact. Numerous data supports the claim that human impact has an unquestionable effect on this damaging process,” Professor Mark Maslin told delegates. “However, we have the tools and the opportunity to reverse these effects; we need to prepare for this brutal fight." Maslin is a professor of Earth systems science at the University College of London and the author of the 2021 book “How to Save Our Planet: The Facts.” His BCSDH address called for action and promised to equip everyone with the knowledge they need to enable change. Maslin is a leading scientist interested in understanding climate change and the significant challenges facing humanity in the 21st century. He has published more than 180 papers in journals such as “Science,” “Nature,” and “The Lancet.” He was the climatologist on the original 2009 Lancet report on climate

Irén Márta (left), managing director of the BCSDH, and Mark Maslin, who joined the meeting via a video link. approach that fundamentally changes how business leaders view the shortand long-term. That’s what our ‘Time to Transform 2030’ program is all about,” Chikán explained. According to Chikán, the world faces three critical challenges: a climate emergency, the loss of natural diversity, and growing social inequality. He quoted specific numbers to illustrate the threat: the global average temperature is already around 1.2°C above preindustrial levels; 68% of wildlife has already been lost; the wealthiest 1% of society own 44% of global wealth, and the poorest 50% barely 2%. “Climate data is disappointing, but no matter how bad the environment is, [the situation] can be reversed, and we have all the tools at hand,” Maslin told his predominantly business audience. ‘Time to Act’ “These changes must start from bringing “Now is the time to act. The pace and individuals together. When multiplied extent of change so far are less than by millions of people, small deeds can expected,” Attila Chikán Jr., president of change the world.” BCSDH, had emphasized earlier in his His message was, at times, blunt. introductory remarks. “We still have a “It is a life-and-death struggle for our tight timeframe for the fundamental and planet with ourselves for ourselves. immediate transformation of our systems, Individuals, governments and with companies playing a leading role,” companies need to work together. he continued. In addition to accelerating the process “Science has clarified what needs by innovating and transforming to be done; economic actors need their own activities, businesses need to take the necessary steps to do it. to help change individuals, change Transformation requires a change of consumer habits, [and] help them change and global health and has been one of the authors of the annual Lancet Countdown reports since 2015. According to him, it is time to face facts and realize that the relevant knowledge and technology are already in our hands and that companies must play a leading role. The business breakfast of BCSDH, with its 120 member companies that account for 30% of Hungary’s GDP, was followed by a workshop with the participation of CEOs and experts to identify domestic goals, opportunities, and challenges in the critical areas of the council’s newly launched “Time to Transform 2030” program. The primary aim was to initiate collaborative thinking and define the domestic goals associated with the nine paths of the new program.

play a role in the fight against climate change, support local communities, and create platforms,” Maslin insisted.

‘Last Chance’

According to preliminary data from the ongoing BCSDH “Corporate Maturity Survey,” the responding organizations intend to increase their commitment to net-zero greenhouse gas emissions and biodiversity by 2025. At the same time, sustainability indicators are incorporated into management to a lesser extent than the development of this vision, he warned. In other words, economic considerations still often override sustainability needs. László Károlyi, CEO of Legrand Zrt., host of the event, and the current president of the Hungarian-French Chamber of Commerce and Industry told the meeting, “It’s time to do more than just talk about sustainability, carbon neutrality. This is our last chance not to suffer the harshest effects of climate change.” He acknowledged there would be challenges ahead. “It is not easy for a company to operate profitably and sustainably at the same time. In the short run, these solutions may be more expensive, but in the long run, these transformations will make companies more resilient and competitive,” he said.

“It is a life-and-death struggle for our planet with ourselves for ourselves. Individuals, governments and companies need to work together. In addition to accelerating the process by innovating and transforming their own activities, businesses need to help change individuals, change consumer habits, [and] help them play a role in the fight against climate change, support local communities, and create platforms.” “The goal is to preserve the Earth for future generations, and we can only succeed in that together, bringing together consumers, business leaders and government decision-makers,” Károlyi added. Irén Márta, managing director of the BCSDH, told the forum,“The goals of our vision are still achievable. But the next eight years are critical, and every single day counts. This decade of the BCSDH is defined by the ‘Time to Transform 2030’ program, which builds on the results of Action 2020. The three key elements of the program are the nine Paths and the Action Plan to 2050, the high level of commitment of our members, and the maximum transparency that embraces them,” she said.

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Budapest Business Journal | May 20 – June 2, 2022

Fast-growing Data Firm Starschema Aims to Double Staff, Conquer CEE Data analysis company Starschema was bought this spring by Indian multinational HCL Technologies. With a headcount of 200, it is headquartered in Budapest but opened an office in Szeged four years ago, specializing in software development and operating big data systems. The Budapest Business Journal speaks with Hungarian co-founder Tamás Földi about the firm’s rapid growth to date and its future plans.

growth at the time had led to constant working capital-related problems, and so part of the investment went towards financing outstanding debts. In addition, we wanted to reduce client concentration and open an office in the United States. Although this last item ended up costing more and taking longer than planned, it paid off in new clients and higher daily rates. BBJ: This spring, Starschema was acquired by Indian multinational IT and consulting firm HCL Technologies for nearly HUF 13 billion. Your company achieved a yearly growth rate of around 20% and piqued the interest of several Fortune 500 businesses even before the acquisition; what are Starschema’s goals for the next five years? TF: Growth is in our DNA, and we continue to have ambitious goals: we want to double our staff and expand to other countries in our region. This is definitely a challenge with the current state of the job market, so the emphasis will be on our core values (employee first, client second) and winning larger and better projects. There can be no growth without sticking to these values; fairness, a supportive environment, and tasks you can actually enjoy are key for recruiting and retaining employees.

BENCE GAÁL

BBJ: Starschema was founded by freelance IT advisors in 2006, initially focusing on traditional business intelligence projects. How and when did the shift to alternative data processing methods, which became the company’s recipe for success, come about? Tamás Földi: It was the idea of my founding partner, Péter Csillag, to invest in alternative, new-generation and open-source solutions around twothree years after getting started. At the time, the company lacked a clear focus, and we couldn’t compete with industry giants like Oracle and IQsoft in the Hungarian market when it came to traditional technologies. However, there weren’t many companies involved in new-generation, riskier and more innovative technologies at the time, and large businesses preferred tried-andtrue solutions. Although these newgeneration technologies were initially only in use at smaller companies, the increasing pressure on bigger players to digitalize and innovate also drove them to embrace new solutions. And by that time, we already had a considerable advantage of experience with these technologies over our competitors. This mentality would pay off later as well. As innovation partners, we helped our clients to find their way

Business | 9

Tamás Földi around the technology environment so that they could use the agile solutions of the “data world” to deliver products faster and at a reduced cost. BBJ: What were the critical factors behind Starschema’s overseas breakout? Who were the first major clients in the United States who came on board? TF: The significant advantage of the U.S. market is that it’s far less conservative than Europe. Heads of U.S. companies tend to take bigger risks for bigger potential rewards, whereas European businesses prefer to play it safe. The former attitude is more compatible with the solutions we deliver, so it was primarily North American companies that began to approach us. That said, it was through a Hungarian subsidiary that we were able to get our foot in the door at our first large client, an industrial conglomerate. Our good relationship with the Hungarian company made it easier to start a conversation with the U.S. headquarters, which was looking for the specialized expertise I mentioned earlier

on an international scale. We were then able to use this as a reference to find our footing overseas and gain new clients. BBJ: Apart from the big companies like Facebook and Netflix, does the company have any big clients here in Hungary? TF: The company is currently very export-oriented, with 85-90% of our revenue coming from abroad. Of course, we also work with innovative Hungarian companies like Magyar Telekom and OTP Bank. An excellent example of our “relationship beyond the contract” mentality is our recent joint publication with Telekom in Nature Magazine about the dynamics between COVID and mobility. BBJ: In 2018, the PortfoLion regional fund, owned by Eximbank and OTP, invested USD 5 million into Starschema. What was the most significant impact of this investment? TF: The investment was necessary for multiple reasons, both on a strategic and operative level. For one, our rapid

BBJ: With the newfound support from HCL, Starschema is looking to attract experts not only from Hungary but the CEE region in general. How exactly does the company plan to tap into the Central European talent pool? TF: HCL Technologies is present in more than 52 countries, and its infrastructure and experience are invaluable when it comes to opening new offices. We need to serve the prevailing demands of the CEE region in the 21st century, such as hybrid work and global R&D projects for the most prestigious clients in an organization defined by an engineering mindset. The first step will be building a brand and a local community, for which we’re currently making plans. BBJ: HCL puts particular emphasis on ESG aspects in its operation, and Starschema also has a track record of supporting humanitarian efforts; even the UN utilizes your data analysis solutions. Can you tell us about some of the most important projects in which the company was involved? TF: We’re proud to have an opportunity to use our expertise to promote social causes we hold important. Nonprofits run into similar problems as large companies: how to get aid shipments most effectively to their destination, collect and analyze data on microloans to farmers or measure the impact of water purification equipment on the health of schoolchildren in Ethiopia. Projects like these are all built around collecting and analyzing data, and we can readily leverage the experience gained in the competitive sector here. I believe that the most effective way to help is to help with what we do best.

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Budapest Business Journal | May 20 – June 2, 2022

1st St. George’s Day Event Raises HUF 2 mln for Ukrainian Children The first large scale St. George’s Day event in Budapest raised more than HUF 2 million to support the work UNICEF is doing with Ukrainian children. BBJ STAFF

Although the April 30 event took an English theme, this was very much an international affair; fittingly so, as St. George is the patron saint of several other countries and cities alongside England. The event was organized by Englishman Stephen Linfitt, publisher of XpatLoop.com, and the brains behind another charity fundraising event built around a British idea, the annual November Fireworks Party.

Diplomatic Display: From left, Ambassadors Ronan Gargan, Paul Fox, and Liubov Nepop, Eleanor Fox, Ambassador Désirée Bonis and Stephen Linfitt.

Speaking at event, held in the “Every child in Ukraine is suffering Grand Ballroom of the Corinthia right now and they all need help. Hotel Budapest, Linfitt noted that St. UNICEF doesn’t evacuate, when the George’s Day heralds the arrival of going gets tough. We haven’t pulled spring in the traditional Ukrainian out of Afghanistan after the Taliban calendar, and that the saint is takeover and we’re not leaving recognized by many countries. families to their fate in the Ukraine “Nationality is an accident of birth, either,” she said. and so the goal was to bring together Humanitarian Help XpatLoop.com readers of many She added that the United Nations nationalities to extend the bonds Children’s Fund is working to get of friendship and solidarity in an enjoyable way to mark St. George’s Day, more staff and resources into Ukraine. “Right now, there are 200 UNICEF whilst raising funds for children in colleagues working out of five Ukraine,” he said. regional offices offering all kinds Antónia Mészáros, the Executive of humanitarian help,” she said. Director of UNICEF Hungary, told The principal guests of honor guests that her organization is no were the British and Ukrainian newcomer to Ukraine, and has been ambassadors, both of whom spoke providing humanitarian assistance in on the evening. the country since fighting first broke Ukrainian Ambassador Liubov out with Russia’s seizure of Crimea Ukraine’s Ambassador to Hungary, Nepop (left) shares a word with and the low level so-called “frozen Liubov Nepop, emphasized Ukraine’s Antónia Mészáros, executive war” around the Donbas in the east gratitude to the assembled guests director of UNICEF Hungary. that began eight years ago. and to the international community at

large for its solidarity and friendship, and received a spontaneous standing ovation from the audience. “The local British community with our Hungarian and international friends have again shown that we are ready to give a helping hand to those in need. This time, we raised funds for children and families in Ukraine. I couldn’t think of any worthier way to commemorate England’s national day,” the U.K.’s ambassador, Paul Fox, said after the event. They weren’t the only diplomatic representation though, with said Désirée Bonis, Ambassador of The Netherlands, and Irish Ambassador Ronan Gargan were also among the guests.

“UNICEF doesn’t evacuate, when the going gets tough. We haven’t pulled out of Afghanistan after the Taliban takeover and we’re not leaving families to their fate in the Ukraine either.” The event sought to give guests a good taste of England. It included a wine and cheese reception, pairing both English and local cheese with wines from St George Hill near Balaton and other wineries around Hungary, as well as English gin and whisky tasting too, and even a cricket display. Music ranged from classics from the likes of Purcell and Handel to Brit Pop covers to a DJ set drawn from 60 years of British musical hits. Ambassador Fox’s daughter Eleanor sang “Jerusalem,” the musical version of William Blake’s poem that has become a sporting anthem, and there was a funny poetry reading about Shakespeare from Scallabouche founder Alex Latham, who also hosted the evening. Photos courtesy of Xpatloop.com. For more photos see Xpatloop.com/gallery.

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Where are U.S. Markets now, and Where are They Heading?

Business | 11

The Corporate Finance Column

Given record debt levels, rescuing the economy from the next crisis may require a quantitative easing (QE) scenario that (January 2000 to April 2022) dwarfs previous ones; another precipitous drop in interest rates, probably even into negative territory. This may trigger a broad rally in both stocks and bonds. This starts to sound dangerously close to what the influential Austrian economist Ludwig von Mises called a “crack-up” boom, which is followed by an even larger collapse. “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as the final and total collapse of the currency itself,” as von Mises put it. It seems that the cooling inflationary According to Bloomberg, the current the price to pay for taming inflation (in its agenda of killing inflation, as inflation forces would require QT of a magnitude decline in Nasdaq market cap has other words, by cooling demand). This seems less sensitive to interest rate that would induce a fairly severe exceeded that of any recent crisis: approach has perhaps not been seen since increases than economic activity, given recession, whereas the Fed is for now Dot-com bubble USD 4.6 tln Paul Volcker was chair of the Fed in 1980. record levels of indebtedness. targeting a “soft landing” and trying Global financial crisis USD 2.3 tln Although its actions have tanked Current Federal Reserve chair Jerome very hard to avoid a recession. COVID-19 sell-off USD 4.4 tln financial markets, the Fed has far from Powell has recently acknowledged that Given the low pain threshold and lack Current decline USD 7.6 tln cured inflation, which is a stubborn whether the United States achieves a of political will to tolerate a recession, I And alongside the absolute numbers beast. A monetarist economist would say soft landing is out of the Fed’s control. It think it is likelier that the Fed will revert above, the state of the S&P 500 clearly that the 40%-plus rise in M2 (a measure sounds as though the central bank itself to QE at the first sign of crisis, meaning shows there is plenty more room for of the money supply that includes cash, has diminishing confidence in a softthat a recession may be avoided or only further decline. checking deposits, and easily-convertible landing scenario. be minor. The next Fed rescue may well The rise in interest rates over the past near money) over the past two years will Note in the chart below that over come at the cost of inflation not being month has caused an equally dramatic persist in causing high inflation for at the past 20 years, there has been a subdued, and then the more significant wealth destruction in bond portfolios. least the coming year or two. downward trend in maximum interest issue becomes the currency’s credibility. It is a rare occurrence in the financial Even most Keynesian economists rates reached before monetary easing world where wealth destruction is would say that extremely tight labor is required, attributable to vastly Disclaimer: This article is for educational similarly dramatic in bonds and equities. markets with rising wages, as well as increasing debt levels. (and hopefully entertainment) purposes “Nowhere to hide,” seems to be the cry. supply-side bottlenecks (especially in The climb in interest rates is typically only and must not be construed as This value destruction is due to several energy and agriculture), are likely to gradual, but then when a crisis hits, the investment advice. Investors should factors: the ongoing war in Ukraine, COVID cause continued high levels of inflation. Fed tends to cut interest rates precipitously. always obtain their own financial advice. lockdowns in China, and perhaps most The question on every economist’s Q1 2022 stats in America showed importantly, the Quantitative Tightening tongue is whether QT will induce another nominal economic growth of -1.5%, while (QT) program initiated by the U.S. Fed. recession in the United States or whether inflation increased to 8.5%. Stagflation is Les Nemethy is CEO of Euro-Phoenix Financial Interest rates have risen considerably over the U.S. Fed can engineer the proverbial already here, in other words. Advisers Ltd. (www.europhoenix.com), a the past few weeks, with the Fed setting “soft landing.” For the time being, In my humble opinion, the likeliest Central European corporate finance firm. He expectations for even more rate rises. consumer borrowing and spending in scenario is that the Fed will continue QT is a former World Banker, author of Business Whereas in previous crises, the Fed tried America remains strong (although these (perhaps two or three more interest rate Exit Planning (www.businessexitplanningbook. to stem them actively, currently, it seems are always reported with a bit of a lag). increases, not the seven recently forecast com), and a previous president of the to be proactively inducing the crisis. The In my opinion, the landing may be by the Fed) until something breaks or American Chamber of Commerce in Hungary. Fed appears to view value destruction as very hard if the Fed follows through on the Fed decides to pivot again.

Corporate finance columnist Les Nemethy examines the chances of the Fed pulling off a “soft-landing” as it tries to balance the demands of current rising inflation and potentially looming recession.

Monthly U.S. Federal Funds Effective Rate

Your essential Guide to Investing in Hungary including articles looking at the benefits available, case studies, EU funding, and commercial property investment.

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12 | 2

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Budapest Business Journal | May 20 – June 2, 2022

EIB, MNB Agreement Unlocks More Options for Financing Long-term Green Projects The European Investment Bank and the Magyar Nemzeti Bank (the National Bank of Hungary or MNB) have signed an agreement under which the EIB will be able to offer more long-term forint loans. EIB vice president Teresa Czerwinska (left), who is responsible for operations in Hungary and MNB deputy governor Barnabás Virág.

BBJ STAFF

The deal creates a new source of more affordable financing for Hungarian clients in forints, which will, in turn, accelerate sustainable economic growth, the post-pandemic recovery and climate action in Hungary, the two sides say. The agreement allows the EIB to offer fixed-rates forint loans to its clients in Hungary for up to 20 years and, in return, provides the MNB with access to euros for its operations. “This cooperation will mitigate the exchange rate risk currently affecting Hungarian borrowers of loans in euros and allows more long-term investments in infrastructure, climate action, sustainable cities and regions, and environmental sustainability,” EIB vice president Teresa Czerwinska, who is responsible for operations in Hungary, said of the deal. ADVERTISEMENT

support to the EIB in its role as a reliable booster of Hungarian economic and social development,” she said.

“This cooperation will mitigate the exchange rate risk currently affecting Hungarian Expanded Mandatex MNB deputy governor Barnabás Virág borrowers of loans in euros noted that last year the MNB’s mandate had been supplemented with the support and allows more long-term of the government’s policy linked to investments in infrastructure, environmental sustainability. “In line with its green mandate, the climate action, sustainable MNB approved its Green Monetary cities and regions, and Policy Toolkit Strategy and decided to environmental sustainability.” launch two new programs, the Green “It expands the range of long-term financing options available in Hungary, a crucial precondition for sustainable growth and a competitive economy. I would like to thank the MNB for its

Mortgage Bond Purchase Program and the Green Home Program, to boost green mortgage lending and improve the energy efficiency of the domestic housing stock,” he explained. “The agreement with the EIB is another important step towards supporting the financing of domestic green projects. He

added that environmental sustainability considerations do not affect the general orientation of monetary policy,” he added. The operation is the EIB’s response to growing market demand for local currencyindexed loans. For the EIB, the Hungarian forint is currently the fourth-ranked currency in terms of disbursed amounts after the euro, U.S. dollar and Polish zloty.

About the EIB The European Investment Bank (EIB) is the long-term lending institution of the European Union and is owned by its member states. It makes long-term finance available for sound investments that contribute to EU policy goals.

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Budapest Business Journal | May 20 – June 2, 2022

Special Report Automotive

Market Talk: Skids Underneath Automotive Sector Slow Manufacturing Output

The output of automotive companies, which is Hungary’s largest manufacturing segment with a 22% share of the overall manufacturing sector in March, fell by a year-on-year 13.3%, according to the latest economic indicators compiled by the country’s Central Statistical Office (KSH). The semiconductor shortage and supply chain problems caused by the aftermath of the pandemic and the Russian invasion of Ukraine have dented output. The sputtering performance of the sector also dragged back Hungary’s headline industrial output in March, which slowed to a growth

3.6%

compared with February’s 4.8%. Adjusted to the number of workdays, overall output climbed 4.2%. “At the moment, the combination of the restrictions due to the coronavirus, the semiconductor shortage, and the uncertainties in the supply of components due to the Russo-Ukrainian war are

having an impact on the automotive industry worldwide, including Audi Hungaria’s production,” Audi Hungaria Communication told the BBJ. “As of today, the global chip shortage is still causing the main concerns,” Zsuzsanna Bonnár-Csonka, head of corporate communication at Magyar Suzuki Zrt., agreed. After KSH published the March figures, Magyar Bankholding chief analyst Gergely Suppan told state-owned news agency MTI that supply chain interruptions remain a significant risk, not only for the automotive sector but for companies that turn out products as diverse as aluminum or artificial fertilizer. Also talking to MTI, ING Bank senior analyst Péter Virovácz said the slowdown was “hardly a surprise,” given the series of automotive industry scale-backs since the outbreak of the war as companies faced parts shortages.

Mitigating the Impacts

Audi Hungaria says it is committed to mitigating the negative impacts of the current situation. “We are doing everything we can to minimize the impact of these

Tier

suppliers in the affected areas. But that does not mean there are not still supply chain challenges. “Our Tier 1 suppliers have several Tier 2 and 3 suppliers in Ukraine, and they are making huge efforts to maintain the supply of parts,” Bonnár-Csonka said.

COVID and the shortage of microchips, the war in Ukraine, and sputtering supply chains have held back Hungary’s automotive industry, the main engine of the national economy, in turn weighing on the industrial output of the country. The Budapest Business Journal asked local players how they are coping with the less than ideal market environment. CHRISTIAN KESZTHELYI

market. However, its Hungarian plant is in a somewhat better position than Audi as it has no

Suspended Shipments

Zsuzsanna Bonnár-Csonka external factors on our company and our employees as far as possible. Audi Hungaria has several suppliers in Ukraine. The conflict has an impact on our suppliers and our supply systems, and thus on the production of our engine and vehicle plants,” the company told us. Nevertheless, Audi Hungaria says that production at its Hungarian plant is stable as the company has temporarily adjusted output to the available components in light of the disruptions. “We are constantly analyzing the situation and are in close contact with the [parent company] Volkswagen Group and our suppliers. Our suppliers in Ukraine are doing their utmost to stabilize production at their plants,” Audi Hungarian added. Magyar Suzuki is similarly cautious and mindful about disruption in the

Due to the suspensions by the transport companies, Magyar Suzuki has decided to cease shipment to Russia. “Our company has suspended car exports to Russia and Ukraine as of March as well. We export around 10,000 cars to Russia and Ukraine per year from Esztergom. We shifted the affected orders to other markets to maintain our planned production volumes,” BonnárCsonka explains. With supply chain issues affecting new auto output in Hungary, a trend that is common in several other European countries, used car sales were up by 12% in March, according to Das Weltauto, the second-hand auto business of vehicle importer Porsche Hungaria. Citing figures compiled by Datahouse, it said Opel was the most popular brand among used car buyers during the period, with Volkswagen the runner-up, followed by Suzuki. Das Weltauto Centrum sales director Péter Tóth said used auto prices are on the rise, climbing as much

15-20%

for some models, as the supply of new cars declines, MTI reported. Hit by pandemic lockdowns and then the war in Ukraine, globalization appears to be giving ground slowly to localization, with much talk about shortening supply chains and nearshoring operations. However, the difficulties of the situation cannot be underestimated, as is clearly shown by Magyar Suzuki’s response. “This is a very complex issue in many ways, but it is very important to review the entire supply chain and to stabilize and improve critical elements, especially in light of ongoing supply disruptions. We should learn from the problems, not bypass them, in order to move forward,” Bonnár-Csonka concludes.

The Budapest Business Journal reached out to all the leading automotive manufacturers in Hungary to probe the current market sentiment. Only Audi Hungaria and Magyar Suzuki had responded to our The Audi Hungaria factory in Győr. approaches at the time of writing.

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Special Report

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Budapest Business Journal | May 20 – June 2, 2022

Vodafone’s Vantage Towers to Install EV Chargers Across Hungary Vantage Towers Hungary Zrt., in cooperation with Elektromotive Hungaria Kft., will install around 60 electric charging stations at 38 base stations nationwide in the next year. The tower company says it will thus make a significant contribution to Hungary’s electric car interoperability and the promotion of green electromobility. GERGELY HERPAI

The infrastructure network company, which Vodafone launched as a standalone company within the group in June 2020, will install around 60 electric vehicle chargers next to its most accessible base stations across the country. The chargers will be based on the renewable energy power supply of the base stations. The tower business says it is always looking for ways to use its telecom base stations for other purposes, replacing the classic single-function operation with innovative multifunctional platforms that build on the existing base station ADVERTISEMENT

CMY

e-mobility, sustainable transport, and its own telecom base station service,” the deputy state secretary said. “The Hungarian government welcomes and supports solutions that reduce the environmental burden through innovation and digitalization and enhance sustainable development. We hope that with this announcement, other companies and businesses will also look at how they can create useful solutions and cooperation by expanding their existing services,” Solymár added. János Mátyásfalvi, CEO of Elektromotive Hungaria Kft., explained that the company had been one of the pioneers of e-mobility in Hungary and was involved in installing “hundreds” of home and public charging stations. He added that the Vantage Towers project, won through a tender, “involves not only the installation of chargers but also the construction and operation of a complex charging system. One of the system’s core elements is InfoCharger, our own development, and the product is assembled in Hungary,” Mátyásfalvi said. ecosystem, in this case, its renewable about local information like nearby Elektromotive Hungaria Ltd., power source, to make them more costattractions and can also be used registered in 2011, is a significant effective and sustainable. as a commercial advertising space participant in the government-backed Vantage Towers Hungary has more than for static or video content. Jedlik Ányos Plan announced in 2014, which aims to replace all internal 1st of its Kind combustion engine vehicles in Hungary stations, “We hope that our project, the first of its with plug-in hybrid (PHEV), extendedgiving it the second-largest market kind in Hungary, will contribute greatly range electric vehicles (E-REV) and share in the country. As of Nov. 1, 2020, to introducing environmentally friendly 100% EVs. According to Wikipedia, the Hungarian operation has covered and sustainable electric cars in Hungary,” Jedlik Ányos was a Hungarian inventor, 100% of its electricity needs from said Gergő J. Budai, CEO of Vantage engineer, physicist and Benedictine priest renewable energy sources. Towers Hungary. considered by Hungarians and Slovaks The chargers installed will be “Our medium-term plans include not to be the unsung father of the dynamo 2x22 kW AC units and 180 kW DC only increasing the number of charging and the electric motor. Elektromotive lightning chargers. The former will be stations in Hungary but also expanding Hungaria is a founding member of the able to serve plug-in hybrids and full the program to other countries,” he said. Jedlik Ányos Cluster, and a market EVs and will be installed in locations Budai added that the tower company is leader in installing lightning chargers. where drivers typically spend more committed to green operations and has According to Mátyásfalvi, the number of time. The latter, which are capable of replaced its company fleet with EVs and charger installations exceeds 1,000. charging EVs and buses very quickly, plug-in hybrids. Vantage Towers is one of Europe’s will be located in places where it is Károly Balázs Solymár, Deputy State leading tower companies, with around essential to charge the vehicle in a Secretary for Digitalisation at the 82,000 macro towers in 10 countries. short time to achieve a significant Ministry of Innovation and Technology, The portfolio includes towers, antennas, range (for example, roadside rest stops welcomed the initiative. indoor base stations (DAS) and small and gas stations), as they can provide “Today, digitalization is an integral part cells. By building, operating and leasing up to 300 km of range in just 20-25 of our lives, as exemplified by the unique this passive infrastructure to Vodafone minutes. solution of the international telecom and other network operators, Vantage Another feature of the chargers is base station provider. The electric car Towers says it is making a significant the large multifunctional touch screen, chargers will be installed by a large contribution to the efficient and which, in addition to monitoring company and its partner, which has sustainable digitization of Europe. The the charging status, informs users found a valuable collaboration between group HQ is in Düsseldorf, Germany.

2,000

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PRESENTED CONTENT

Special Report | 15

On the Path to Being a European Cycling Powerhouse Whether making two- or fourwheeled vehicles, Hungary’s role in mobility is constantly strengthening. As an overview by the Hungarian Investment Promotion Agency (HIPA) showcases, the country is a leading industrial investment hub that no longer attracts just the attention of car and batterymaking investors but is also on the right track to becoming a bicycle manufacturing heavyweight. BBJ STAFF

To claim that automotive is big in Hungary is an understatement. It is enormous and makes the country a sectoral powerhouse in the EU. Some 700 automotive companies, including five original equipment manufacturers with production sites here, three with service centers, and 66 TIER1 suppliers, produce half a million autos and 2.1 million engines per year. Moreover, Hungary is the only place outside Germany that hosts production units of all three premium German carmakers (Audi, BMW, and Mercedes). On top of that, it is the largest battery cell producer in Europe; with manufacturing capacity to hit 150 GWh by 2025, it is sure to remain among the frontrunners.

e-bike sales totaled nearly 22 million in the EU and the United Kingdom combined in 2020, the highest figure in the past 20 years. One of the reasons behind this boom is the great innovation and continued development of bicycles. Giant, for instance, started e-bike R&D back in the 1990s. Customer interest doesn’t show any signs of dropping, and in Hungary, it is also driven by programs like the grants offered by the Hungarian Ministry of Innovation and Technology, the second wave of which offers generous state subsidies for some

Giant, the world’s largest bike producer, opened its second European plant in Hungary in 2019. Foreign direct investment fuels the engine driving those impressive figures to a great extent. HIPA guided

176 large

FDI projects in automotive between 2014 and 2021 that generated an investment volume of more than EUR 9.6 billion and created nearly 40,000 new jobs. In the past three years, the battery industry alone mobilized EUR 6.2 bln in FDI. Year after year, automotive is one of the sectors that attracts the most capital from foreign investors. Sector statistics include the performance of the bicycle industry, which has a tradition of more than 90 years in Hungary. While Csepel is the brand that has been around the longest, it is challenged by local, nextgen players such as Neuzer, Gepida, and Accell Hunland, whose high-quality products can also be found in some European shops. The ecosystem is further supported by Bosch’s activity specializing in e-bike powertrains and smart systems.

13 and Rising

According to Eurostat, Hungary ranks 13 in the EU regarding the number of bicycles manufactured. That position is set to improve soon, though. For one, HIPA is assisting leading Hungarian manufacturers in ramping up production. More importantly, Taiwanese-based

E-Bike Sales in Europe (in units) 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000

Source: CONEBI

20 15 20 16 20 17 20 18 20 19 20 20 20 2 22 0 F 21 20 ore 23 ca st F 20 ore 24 ca st F 20 ore 25 ca Fo st re ca st

Giant, the world’s largest bike producer, opened a new plant in Gyöngyös (80 km northeast of Budapest) with a EUR 48 mln investment in 2019 that is scheduled to produce up to one million units annually in a few years. These capacity expansions combined could propel Hungary to the top five largest bike manufacturers on the continent. Giant’s Hungarian facility is the company’s second European location where bicycles are made. As chairperson Bonnie Tu notes, being a consumerdriven company, it wants to show its long-term commitment to dealers and consumers by being rooted in the market, not only through its brands and sales but also in manufacturing and supply. “Hungary is at the center of a high growth potential region, with perfect conditions and location, a favorable business climate and policies, and an excellent place to develop cycling infrastructure and culture. Here is the right place for us to further expand, settle and cultivate for the future,” she explains. The bicycle maker can be happy about its

2021 results,

which saw revenues of USD 2.3 bln and 4.9 million units sold in the aftermath of the pandemic. However, gloom also looms over the industry. Supply chain disruptions, raw material shortages, and shipping delays are significant issues, not to mention the impact of inflation and the war in Ukraine. Recent lockdowns in China put an extra burden on production, delaying the ability to catch up with overdue orders. “It will take us a lot of effort to rebuild and improve the fundamental basics,” adds Tu. The good news is that the demand for bikes is at an all-time high. Rising environmental awareness is undoubtedly part of the story, but so is the postpandemic trend that, after the lockdowns, people are just yearning to be outdoors, and ever more often on two wheels.

20 Year High

All this translates into purchases. As the Confederation of the European Bicycle Industry (CONEBI) reports, bicycle and

10,000 e-bikes.

Tu expects the current boom to slow down but growth to continue in the long run. However, supply chains must be shortened, and although reshoring can help prevent disruptions, costs won’t drop much any time soon, which will keep prices high. Tu is still optimistic, though. “We need to be brave to take the opportunity of growth and take our responsibility to continue pushing bicycles to the world because this is the right thing to do. We will invest more in onshore manufacturing, cluster the supply chain, and develop short-chain supply to be reliable and responsive to the market and our consumers,” she says. “The bike industry will continue innovating and developing products to make cycling more comfortable, convenient, and connected.”

Momentum for European Cycling The second most prestigious cycling race after the legendary Tour de France, the Giro d’Italia draws roadside crowds and TV viewers’ eyeballs on a massive scale. A feature is that the starting location for the Grande Partenza (literally the Grand Departure) has changed each year since the 1960s. The cyclists of the 2022 edition departed from Budapest for the first time. On that occasion, HIPA, Giro organizer RCS Sport and CONEBI co-hosted a flagship event on the sidelines on what is shaping the industry in Europe. The high-level speakers agreed that better infrastructure, more government subsidies, and raising social awareness are all needed to make cycling a natural everyday mobility option. Electrification is just as important to appeal to the larger public. “We need to get decisionmakers to be interested and make people aware of the benefits of cycling. We need to seize this momentum,” RCS Sport managing director Paolo Bellino concluded.

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Budapest Business Journal | May 20 – June 2, 2022

Hungary’s majority state-owned listed manufacturer Rába Automotive Group (Rába Járműipari Holding Nyrt.) posted a loss of HUF 570 million after the company issued a warning in late April that its Q1 2022 earnings report may announce a nearly HUF 500 million loss. CHRISTIAN KESZTHELYI

The firm tagged the “drastic” impact of hiking energy prices on its energy-intensive axle production, noting that the war in Ukraine

Automotive News

has contributed to energy prices remaining high. Rába said in April it had increased the flexibility of its production and introduced stringent cost management measures to mitigate the impact of skyrocketing energy prices on its business, and is now focusing on improving the efficiency of its technology and production processes. The company also noted that passing on the “four- to five-fold” increase in energy prices to the customers by

Although disruptions and calamities in the past few months have increased the pressure on the Hungarian automotive sector, some inaugurations and investment announcements have indicated longer term optimism for the sector.

of the capital) via a HUF 800 mln investment to preserve 589 jobs. As a result of the investment, which was part of a HUF 1.8 bln investment project that received a HUF 450 mln government grant aid, the company will no longer need to rent warehouse space.

Pata József Gépipari Investment Saves 115 Jobs

Rafi Magyarország Invests HUF 2.3 bln, Saves 536 Jobs

Pata József Gépipari, a familyowned automotive industry supplier, inaugurated a HUF 303 mln capacity expansion by purchasing equipment and expanding its warehouse at its base in Fajsz (180 km by road south of Budapest). The investment, which was supported by a HUF 137 mln government grant, contributed to the preservation of 115 jobs.

German-owned supplier Rafi Magyarország has announced it will be investing HUF 2.3 bln at its base in Mezőtúr (180 km southeast of Budapest) to preserve 536 jobs. The company is constructing a warehouse and is upgrading infrastructure at its base through a project that has received HUF 630 mln in government funding.

Modine Hungária Saves 589 jobs via HUF 800 mln Investment

Rosenberger Magyarország Eyes HUF 15 bln Investment

Modine Hungária, an automotive parts manufacturer, has opened a 3,500 sqm warehouse at its base in Gyöngyös (80 km northeast

Automotive Matters

A monthly look at automotive issues in Hungary and the region

Photos courtesy of Rába Járműipari Holding Nyrt.

Rába Posts HUF 570 mln Loss in Q1, Pays no Dividend on 2021 Earnings

Rosenberger Magyarország, owned by a German electronics maker, will be investing HUF 15 bln at its eastern Hungary bases in Jászárokszállás, Jászberény and Nyírbátor. The

lifted by the sale of a hotel in the center of Győr for HUF 1.5 bln and by financial losses narrowing to HUF 200 mln from 2020’s HUF 900 mln. Last year, Rába ’s revenue rose by 20% to HUF 46.4 bln; export sales accounted for HUF 32.9 bln of the total; and direct cost of sales outpaced revenue growth, climbing 22% to HUF 37.6 bln. At the end of 2021, Rába had consolidated total assets of HUF 45.2 bln and consolidated total comprehensive profit of HUF 1.28 bln.

increasing what it charges for the final products it turns out was a “great challenge.” Rába has shown caution relating to its business operations. In mid-April, shareholders decided at an annual meeting to pay no dividends on the company’s 2021 earnings but to rather place the funds into the company’s profit reserves. In 2021, Rába booked an after-tax profit of HUF 1.3 billion, a marked improvement from 2020’s HUF 1 bln loss. However, the profit was mainly

Hungarian firm makes electronics, chiefly for the automotive industry, and employs about 4,000 people. The company expects the investment to strengthen its competitiveness and market position.

TDK’s HUF 26 bln Investment to add 250 Jobs Japanese giant TDK will invest HUF 26 bln in its automotive electronics capacity in Szombathely (225 km west of the capital), which will enable the production of sensors for electric vehicles. The investment, which will create 250 jobs, is supported with a HUF 6.6 bln government grant.

AVL Enters 2nd Phase of HUF 12.5 bln Investment Austrian engineering company AVL has entered the second phase of a HUF 12.5 bln development center in Érd, on the southwestern outskirts of Budapest, by laying the cornerstone of another office building and a garage. This element of the project, which received a HUF 1.5 bln in

state grants, will add 350 jobs to the currently 474-strong staff. The garage will be finished by the end of 2022 and the new office building by June 2023. The complete scheme includes a competency center in Zalaegerszeg (225 km southwest of Budapest), where the ZalaZONE vehicle test track is located, as well as an R&D center in Érd, which covers almost the entire vertical development of drivetrain systems.

Hungarian to Replace Czech Leader at BMW Group Magyarország Zoltán Gombos, a Hungarian engineer who has been in charge of sales at BMW Group Magyarország since 2018, has become the managing director of the German car manufacturer’s local unit, replacing Maciej Galant, who is taking a position in Prague as of this month. Gombos joined the company in 2013 as a parts and services manager and has more than two decades of experience in the automotive industry.

www.bbj.hu

Budapest Business Journal | May 20 – June 2, 2022

PRESENTED CONTENT

Supporting Diversity and Sustainability, Pushing Electromobility

“When I started my career, it was not so common to see many women in leading positions, particularly in the car industry. But times have changed, and I see progress: probably not as fast as I would wish, but change still.”

ROBIN MARSHALL

BBJ: What are your immediate goals for the business in Hungary? FA: Taking Mercedes-Benz in Hungary forward in its success story of continuous and sustainable growth; pushing the transformation toward digital and electric together with our retail partners; offering our customers exciting products and a modern luxury experience in all the touchpoints; and, finally, for my employees a very good place to work. BBJ: Sustainability and e-mobility must be taking an ever-greater role in your plans. What are the targets for Hungary here? FA: Mercedes-Benz is committed to sustainability; therefore, we are accelerating the transformation into

and I have a very professional team with which to work together. All in all, I am happy to be here. Can you guess what my biggest challenge is? Of course, the Hungarian language! But I expected that before coming here. BBJ: Is there anything unique or particularly challenging about the Hungarian business? FA: We are unique as MercedesBenz in terms of plug-in hybrid (PIH) because we provide the widest range of these kinds of models. As a result of this, in 2021, we achieved the biggest share of PIH in Hungary. In addition, we are the only company that provides diesel plug-in hybrid cars in the premium segment. Facilitating the uptake of e-mobility in Hungary is crucial. From time to time, there are government schemes that aim to accelerate the spread of green vehicles. These are excellent initiatives that we fully appreciate, although MercedesBenz vehicles cannot always benefit from these programs. Another challenge can be the Hungarian forint exchange rates when it comes to pricing.

In an exclusive interview, the Budapest Business Journal talks with Italian Fabiola Attorri, CEO of MercedesBenz Hungária Kft., about gender and diversity, sustainability, and her plans for the German luxury marque in Hungary.

BBJ: You are an Italian woman in a leading position. Although neither are unknown, they are not particularly common among Hungary’s expat CEOs. Do you see yourself as a role model for your gender and country? Fabiola Attorri: I hope not to represent an exception but an example! I am not used to thinking about diversity only with reference to gender; to me, it means much more: a variety of experiences in all its facets, which enriches organizations and society. Yes, when I started my career, it was not so common to see many women in leading positions, particularly in the car industry. But times have changed, and I see progress: probably not as fast as I would wish, but change still. At Mercedes-Benz, we have taken significant steps forward in supporting competent and professional women colleagues and promoting the culture of diversity, and we will continue in that direction. The same is also true at Mercedes-Benz Hungary (MBHU).

Special Report | 17

Fabiola Attorri an emission-free and softwaredriven future. Our motivation is to be CO₂-neutral by 2039, as declared in our “Ambition 2039” strategy. What does it mean for e-mobility? By 2022, Mercedes-Benz will have battery electric vehicles in all segments we serve. From 2025 onwards, all newly launched vehicle architectures will be electric-only, and customers will be able to choose an all-electric alternative for every model we produce. Of course, Mercedes-Benz Hungária Kft. follows the corporate objectives in this field as well. Electromobility is a priority for us; thus, we provide all the available new electric models in Hungary. This means that, with the new EQE as of this May, we have nine all-electric passenger cars and vans. We have supported and trained our colleagues and dealers to sell and service electric vehicles, and we have already seen significant results. In relation to local e-mobility ambitions, the number of charging station possibilities is a crucial point. Together with our

dealers and in cooperation with other partners, we are working on broadening the availability of charging points. BBJ: How much experience of the Hungarian market did you have prior to taking up your position in November 2021? FA: I was in Mercedes-Benz HQ for the last seven years and was responsible for the European retail network: 19 markets, including Hungary. Therefore, I was already in contact with some of our colleagues at MBHU, and I can say that it was not completely new to me when joining here. BBJ: Now that you have been here for a few months, how does it match your expectations? FA: The experience so far exceeds my initial expectations! I like the country, and I like living in Budapest, which I find a vivid and charming city. The people are nice and, in general, show sympathy for me when they see that I am Italian. From a business perspective, the Mercedes-Benz brand is well positioned,

BBJ: Aside from your native Italy, you have also worked in North America, Australia and Germany. How does Hungary compare? FA: All the places you have mentioned attract me for very different reasons and probably because each one is so different from the next and somehow unique. Working in these places has been a great experience, and I expect it will be the same here in Hungary. The similarity I can see among the three when referring to the business is in some processes that in MercedesBenz we have harmonized worldwide; nevertheless, there are still market specifics that differentiate those countries as well as cultural aspects, history and lifestyle. North America and Australia particularly appear to me to be quite different from Hungary, but it does not mean that one is better than the other. I am a mobile person and have always been very curious to know about other countries. Having lived abroad for a while, I can say that embracing the essence of new cultures enriches us as individuals and professionals. I would, therefore, encourage others to be open and respectful of the local culture when living in a host country; locals realize it and are more open to welcoming you in return.

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Special Report

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Budapest Business Journal | May 20 – June 2, 2022

Second-hand is the New New

The popularity of compact cars pushed automakers to build them larger, and now they are eating up the middle-upper category car segment. “Nowadays, we see very little difference in length between a BMW 3 combi and an Opel Astra,” Halász points out.

In the beginning, it was the microchip shortage disrupting supply chains. Now it is the war in Ukraine. The result is a market with a severe lack of new cars and a reevaluation of second-hand autos.

Low Cost, High Demand

The COVID pandemic had its own impact on the second-hand auto market. A completely new segment emerged: the second or third car per family. Very cheap, very small vehicles were suddenly in high demand, driven by the fear of infection in public transport. Beginning in 2020, used cars worth around HUF 500,000 were massively imported from Western countries. The sales of aging Opel Corsa and Suzuki Swift models were wild back then, although it has slowed since. The big hit these days are younger second-hand autos. The problem is that there are none left on the market.

“These times are not ‘normal,’ and cars are sold without bargaining. Dealers cannot meet demand; cars are sold in a very short time, at the advertised price. In some cases, buyers are even auctioning cars, so some of them may sell at a higher price than advertised.”

BALÁZS BARABÁS

The first signs of a changing market appeared in January this year. Online portal mobile.de indicated that Germany’s second-hand small auto segment grew by 24.3% year-on-year, reaching an average price of EUR 15,961, while the middle-upper sector went above EUR 40,000 for the first time. Between November 2020 and November 2021, the average period for selling a second-hand car fell by 10 days, down to 86, and the number of vehicles on sale plummeted

28.8%,

from 693,000 to 493,000. The trends were fueled by several factors: a narrowing of production of new autos due to the chip shortage and a higher demand for vehicles, given the need for isolation during the pandemic and a reluctance to travel on mass public transport. This was terrible news for the Hungarian second-hand car market, as Germany and Austria were traditionally the primary sources for local dealers. But the snowball effect was already there. According to data published by second-hand car online sales portal hasznaltauto.hu, in Q1 2020, the average price of used cars for sale was slightly above HUF 2.5 million, rising to HUF 3.5 mln in Q1 2021 and to HUF 4.5 mln in Q4 2021. Another Hungarian online portal, joautok.hu, operates differently from hasznaltautok.hu. Users cannot post cars for sale freely; instead, joautok.hu has agreements with carefully selected and checked dealers to ensure that the autos offered on the site are guaranteed to be technically in optimal condition and meet legal norms for origin and usage.

Bertalan Halász, the director-general of joautok.hu. This not only ensures safety for buyers but also allows for the gathering of relevant and reliable data about the car market. Of the roughly 2,500 car dealers operating across Hungary, joautok.hu has contracts with about 400. To further refine the data, joautok.hu partnered with Datahouse, which monitors all car registrations with the Hungarian authorities, both new autos and second-hand imported vehicles.

Feeding the Fleet

Bertalan Halász, the director-general of joautok.hu told the Budapest Business Journal that the total amount of cars currently in Hungary is around 4.3 million. Two channels add to this number: new autos and imported used cars. Each adds approximately 150,000 vehicles annually to the national fleet. Until recently, the growth has been continuous: 10-12 years ago, Hungary’s national fleet numbered about 2.8 million autos. The cars exiting the market usually go to disassembly yards or continue their life cycle in other countries, typically

further east of Hungary. Internally, cars are sold on average

HUF 3.5 mln,

while dealers have a margin of about HUF 250,000 per car, Halász says. The combined data acquired by joautok.hu and Datahouse indicates massive changes recently in the auto market in Hungary. In more normal times, the posted cars have a narrow bargain margin. That wasn’t so much the case at dealers, however, because they were not under time pressure to sell fast. “But these times are not ‘normal,’ and cars are sold without bargaining. Dealers cannot meet demand; cars are sold in a very short time, at the advertised price. In some cases, buyers are even auctioning cars, so some of them may sell at a higher price than advertised,” Halász says. As for specific brands, here there are also changes. For years, the popular choices in Hungary were compact cars; the VW Golf, Ford Focus, and Opel Astra. During the last 5-10 years, Korean brands have risen significantly. Meanwhile, designs have changed too.

In Hungary, as in Western countries, the majority of all new cars sold, roughly two-thirds to three-quarters, start their life cycle in company car fleets. Before the credit bubble burst

2008,

many private buyers also bought new cars. The credit volume was so huge that dealers were selling new autos with zero margins, making profits instead from credit placement commissions. After the leasing period ended, fleet cars, usually two-to-four-years-old, were sold to dealers and from there on to private buyers. But this chain has been fundamentally damaged. There are far fewer new autos on the market. A Skoda Octavia, a popular fleet car, is now shipped no sooner than 16-18 months. As companies find it harder to replenish their fleet, the young second-hand car market has dried up. Hungarian dealers have tried to import from Western countries, but they also lack new cars for similar reasons. This all leads to another negative phenomenon: the growing age of cars. In 2008-2009, when many new autos were entering the national fleet, the average age of a vehicle was 10 years. Last year, this had risen to 15 years, and with the supply chain disrupted by the war in Ukraine, this will likely further deteriorate, Halász warns.

www.bbj.hu

Budapest Business Journal | May 20 – June 2, 2022

News AUTOMOTIVE

in Brief

Re-Glass Wins HUF 350 mln Expansion Grant Glass recycler Re-Glass Kft. has won close to HUF 350 million in European Union and state grant money to support an expansion of the company’s storage capacity and an upgrade of its process for recycling windshields, managing director Ferenc Aszódi told state news agency MTI. Re-Glass will add around 2,600 sqm to its warehouse capacity and improve its conveyor belt system, Aszódi said. The company will also work on developing a process for breaking down windshields in a pilot project, he added. If successful, the process could boost hourly windshield recycling capacity from just 500 kg to 20 tonnes, he said. Re-Glass could patent the technology and sell it, he added. Re-Glass has bases in Orosháza (180 km southeast of Budapest), Mezőörs (105 km west), and the capital. It recycles about 65,000 tonnes of glass waste a year.

Budapest Airport Installing 176 EV Charging Stations Ferenc Liszt International operator Budapest Airport Zrt. announced on May 10 plans to install an additional

176 electric vehicle charging stations over three years, according to napi.hu [Daily]. Close to HUF 650 million in European Union funding will cover half of the costs of installing 134 of the charging stations, with Budapest Airport covering the full cost of installing 42. The charging stations will be used by ground handling and other service vehicles. Budapest Airport earlier installed 31 charging stations, 12 on the airside and 19 on the landside of the airport, and has signed a contract to install 35 more. An additional 30 charging stations are used on the airport premises by Budapest Airport partners.

ELTE Launches AI Department With Bosch Budapest’s Eötvös Loránd University (ELTE) launched an artificial intelligence department, Hungary’s first, at its IT faculty on May 9, with the support of the local business of German engineering giant Bosch, according to novekedes. hu [Growth]. Research conducted at the ELTE-Bosch AI department is expected to contribute to the advancement of self-driving vehicles, industrial automatization, machine vision, and the development of systems used to map

Special Report | 19

Chervon Investing Another HUF 17 bln in Miskolc China’s Chervon Auto will invest another HUF 17 billion at its car parts plant in Miskolc (180 km northeast of Budapest), Minister of Foreign Affairs and Trade Péter Szijjártó said on May 9, according to origo.hu. Chervon will add high-tech equipment to produce metal castings for electric vehicles, Szijjártó said. The state is supporting the investment, which will create 122 jobs, with a HUF 4 bln grant, he added. Chervon Auto laid the cornerstone of the first HUF 17.5 bln phase of its manufacturing facility in Miskolc last November. Production is set to start at the plant, Chervon Auto’s first greenfield investment outside of China, in H2 2022.

neural networks in the human brain. By partnering with Bosch, ELTE can gain direct access to innovative industrial trends on an international scale, while Bosch can add to the output of its R&D activities, Minister for Innovation and Technology László Palkovics said at the launch. Bosch group’s head in Hungary, István Szászi, said the company is supplying the department with an industrial foundation, know-how and the

From left, Gyula Gaál, CEO of Chervon Auto Kft., Minister of Foreign Affairs and Trade Péter Szijjártó, and local Fidesz Member of Parliament Katalin Csöbör at a press conference on May 9, 2022. Photo by Lajos Soós / MTI

opportunity to put theoretical instruction into practice. He added that the 400 sqm department had undergone a renovation to add research workstations and cooperative areas to the lecture halls. Szászi said one of the “most exciting” areas of research in which Bosch and ELTE cooperate is level 4 and 5 vehicle autonomy, which involves a degree of automatization that requires no human oversight or intervention.

PRESENTED CONTENT

Siemens’ Solutions Drive Automotive Sector into the Future Siemens’s digital products, services and solutions bring unlimited digital potential to the automotive assembly lines in the country. Csaba Pálla, head of the machine tools business at Siemens Zrt., tells the Budapest Business Journal about the futuristic solutions that are already part of the present at the German giant. CHRISTIAN KESZTHELYI

Siemens’s Digital Twin solution, which allows the creation of a virtual world, is a game-changer for manufacturers, Pálla insists. “Using our Digital Twin solution, we can build entire assembly lines in a virtual environment and ‘test’ manufacturing, even before a physical machine is built,” he explains. “This does not only make processes quicker and more streamlined but is also immensely sustainable; there is no need to establish an entire plant and then wait to see which parts will fail down the line and would need to be scrapped and replaced. Therefore, the end product is always maximized for performance and endurance,” Pálla says. The Digital Twin approach is not only beneficial for testing heavy-duty machinery. It is also suitable for

testing electronics and the software running on them, even if those hardware have not yet been made. “The Digital Twin ecosystem can test the behavior of chips in the virtual world. Even before the hardware comes out, the software can be tested. This is time- and cost-efficient as errors can be fixed in

Csaba Pálla and remedial steps would need to be taken physically,” Pálla adds. Additionally, the software can also model the behavior of assembly line operators; indeed, the whole environment where the operators will work can be simulated virtually.

“Using our Digital Twin solution, we can build entire assembly lines in a virtual environment and ‘test’ manufacturing, even before Continuous Monitoring Siemens’ expert says, however, that it a physical machine is built.” goes beyond planning and realizing the digital environment preproduction, which is better than if those were uncovered once the hardware is out

assembly lines for automotive firms in Hungary and worldwide. Once those lines are up and running, the monitoring is ongoing and continuous, with all the data being fed back into the Digital

Twin to ensure further improvement of processes and machines. This approach ensures that no big data is ever lost. Instead, it is stored in Siemens’ industrial cloud solution, which is always available for the users and is highly secure to ensure that no third parties have access to it or could compromise confidential information. But how does artificial intelligence embellish automotive production for Siemens? “AI is not a system that would think instead of humans. It is a system that significantly complements human work. For example, when a vehicle’s body is welded together, there are hundreds of points that used to be manually checked. AI can check these welding points with cameras and sensors and flag potentially problematic points to humans for a more thorough check,” Pálla says. As each and every manufacturing environment is physically (and, therefore, digitally) different, Siemens believes that there is no off-the-shelf product or one-size-fits-all service offering available in the market. “As the first step, we assess the client’s needs and native environment via consultations so we can offer them a customized solutions package. Once this is done, we offer continuous maintenance and ongoing services to ensure that all Siemens solutions run smoothly and complement the client’s needs to the maximum potential,” Pálla concludes.

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Special Report

www.bbj.hu

Budapest Business Journal | May 20 – June 2, 2022

Car Importers Fleet management

–

eleCtRIC

seCond-Hand CaR tRade

–

dIesel, gas

assIstanCe

–

HybRId

leasIng

✓

yeaR establIsHed

RepaIR

120,164

CaR bRands

FInanCIng

648,541

seRvICes

spaRe paRts supply

no. oF veHICles sold In 2021

Company WebsIte

total net Revenue In 2021 (HuF mln)

Rank

Ranked by total net revenue in 2021 (HUF mln)

Suzuki

–

oWneRsHIp (%) HungaRIan non-HungaRIan

top loCal exeCutIve CFo maRketIng dIReCtoR

addRess pHone emaIl

(0.01) Suzuki Motor Corporation (97.53), Itochu Corp. (2.46)

atsumi masato – –

2500 Esztergom, Schweidel J. utca 52. – –

– (100)

balázs németh, peter gstattner – Zsolt Bujáki

1139 Budapest, Fáy utca 27. (1) 451-5100 prsajto@porsche.hu

magyaR suzukI zRt. www.suzuki.hu

poRsCHe HungaRIa keReskedelmI kFt. www.porschehungaria.hu

400,806

✓

–

✓

–

✓

–

1990

toyota CentRal euRope HungaRy kFt. www.toyota.hu www.lexus.hu

236,439 (2020)

✓

–

1990

Toyota, Lexus

–

– Toyota Motor Europe NVSA (100)

Jacek pawlak – –

2040 Budaörs, Budapark Keleti 4. (23) 885-101 infohu@toyota-ce.com

FoRd közép- és keleteuRópaI éRtékesítő kFt. www.ford.com

165,181 (2020)

✓

–

✓

2000

Ford

– Ford Motor Company (100)

attila szabó – –

2000 Szentendre, Galamb József utca 3. (1) 777-7555 inform@ford.com

Wae CsopoRt www.wae.hu

121,418

17,576

✓

–

1991

Jaguar, Land Rover, Opel

Jaguar Land Rover, Isuzu, Ssangyong, Opel

Jaguar, Opel

AutoWallis Nyrt. (100) –

andrew prest Roland Czeilinger Zsolt Jakab

2040 Budaörs, Szabadság utca 117/C (1) 451-4851 info@wae.hu

meRCedes-benz HungáRIa kFt. www.mercedes-benz.hu

119,826 (2020)

✓

–

✓

–

2004

MercedesBenz

MercedesEQ

– Mercedes-Benz AG (100)

Fabiola attorri – –

1133 Budapest, Váci út 96–98. (70) 436-1100 internet-hu@daimler.com

FCa CentRal and easteRn euRope kFt. www.fiat.hu

107,046 (2020)

✓

–

1992

–

Alfa Romeo, Fiat, Jeep, Fiat Professional

–

– FCA Italy S.P.A. (100)

andrew terence Higgins – –

1138 Budapest, Madarász Viktor utca 47/A–B (1) 458-3100 customercare.hu@ fiat.com

poRsCHe InteR auto HungaRIa kFt. www.porscheinterauto.hu

91,666

✓

1993

Bentley, Porsche

Porsche

– Porsche Holding GmbH (100)

szabolcs nagy Tamás Tótvári Péter Árvay

1139 Budapest, Fáy utca 27. (1) 451-5500 info@porschepest.hu

Renault HungáRIa kFt. www.renault.hu www.dacia.hu

82,592 (2020)

1991

Renault

Renault, Dacia

– Renault Group BV (100)

tamás Wachtler – Gabriella Kelemen-Tűz

1138 Budapest, Váci út 140. (1) 358-6000 ugyfel.kapcsolat@ renault.hu

2004

BMW I Performance, Mini

BMW I

– BMW Vertriebs GmbH (100)

anna Rita tonini, zoltán gombos, neil domonic Fiorentinos – –

2220 Vecsés, Lőrinci út 59. (29) 555-100 ugyfelszolgalat@bmw.hu

bmW HungaRy kFt. www.bmw.hu

56,417

✓

–

✓

–

✓

–

✓

–

1991

Audi, Audi, Volkswagen, Audi, Volkswagen, Skoda, Volkswagen, Skoda, Seat, Skoda, Seat Seat, CUPRA CUPRA

BMW, Mini

www.bbj.hu

yeaR establIsHed

Fleet management

CaR bRands seCond-Hand CaR tRade

spaRe paRts supply

no. oF veHICles sold In 2021

seRvICes

Special Report | 21

oWneRsHIp (%) HungaRIan non-HungaRIan

top loCal exeCutIve CFo maRketIng dIReCtoR

addRess pHone emaIl

Nissan

Grand Automotive Kft. (100) –

viktor gyula molnár Zoltán Magyari Gergely Kisfalvi

1124 Budapest, Csörsz utca 49–51. (80) 333-888 hungary@ nissan-services.eu

norbert lászló nagy, kim kuyjung – –

1117 Budapest, Budafoki út 56. (1) 324-2000 info@kiamotors.hu

✓

–

1995

Kia

HyundaI HoldIng HungaRy kFt. www.hyundai.hu

33,619

5,291

✓

–

2007

Hyundai

– AutoBinck Car Distribution and Retail B.V. (100)

pál kovács Péter Tajthy Ibolya Ördög

1186 Budapest, Cziffra György utca 15. (1) 887-5700 info@hyundai.hu

volvo autó HungáRIa kFt. www.volvocars.hu

32,884

2,536

✓

–

1995

Volvo

– Volvo Car Corporation (100)

gábor bodrogai, ágnes tárkányi Ágnes Tárkányi Andrea Sztárcsevity

1044 Budapest, Váci út 50–58. (1) 766-4545 huinfo@volvocars.com

p automobIl ImpoRt kFt. www.peugeot.hu www.dsautomobiles.hu

Frey Automobil Holding Kft. (100) –

györgy balkányi, zsófia bálint kovácsné Péter Lugosi –

1194 Budapest, André Citroën utca 1. (1) 279-5555 kapcsolat@ p-automobil-import.hu

C automobIl ImpoRt kFt. www.citroen.hu

17,995

Citroën

Frey Automobil Holding Kft. (100) –

györgy balkányi Péter Lugosi Nóra Hajdu

1194 Budapest, André Citroën utca 1. (1) 348-4848 kapcsolat@ c-automobilimport.hu

mazda motoR HungaRy kFt. www.mazda.hu

13,315 (2020)

–

– Mazda Motors Logistics Europe NV (100)

tibor együd, david graham mcgonigle Erika Káldi –

1117 Budapest, Infopark sétány 1. Building I (1) 464-5000 mazda@mazda.hu

mm ImpoRt kFt. www.mitsubishi.hu

4,603 (2020)

✓

–

2004

Mitsubishi

Emil Frey Automobil Holding Kft. (100) –

gábor mátrai, Heinz schneiter – –

1149 Budapest, Mogyoródi út 34–40. (1) 422-3910 gabor.matrai@ mitsubishimotors.hu

emIl FRey ImpoRt kFt. www.subaru.hu

975 (2020)

✓

–

1993

Subaru

– Emil Frey AG (100)

gábor mátrai, Heinz schneiter – –

1149 Budapest, Mogyoródi út 34–40. (1) 470-9010 info@subaru.hu

gablInI pRemIum kFt. www.infiniti.hu

648 (2020)

✓

2007

Infiniti

(100) –

gábor Ferenc gablini – –

1141 Budapest, Nótárius utca 5–7. (1) 799-2250 infiniti@gablini.hu

Honda motoR euRope lImIted magyaRoRszágI FIóktelepe www.honda.hu

✓

–

1993

Honda

– (100)

Iwama shigeki – –

2040 Budaörs, Puskás Tivadar út 1. (23) 506-406 iinfo.hu@honda-eu.com

A = would not disclose,

NR = not ranked, NA = not appliacable

27,792

3,549

2,831

✓

–

✓

–

✓

–

✓

–

✓

–

2019

1993

1994

1992

Nissan

eleCtRIC

– KIA Austria GmbH (100)

✓

dIesel, gas

35,985 (2020)

✓

HybRId

kIa HungaRy kFt. www.kia.com

assIstanCe

41,170 (2020)

leasIng

gRand automotIve CentRal euRope kFt. www.nissan.hu

RepaIR

Company WebsIte

FInanCIng

Rank

total net Revenue In 2021 (HuF mln)

Budapest Business Journal | May 20 – June 2, 2022

Peugeot, DS Peugeot, DS Peugeot, DS

Citroën

Mazda

Citroën

Mazda

This list was compiled from responses to questionnaires received by May 18, 2022, and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time. The list is based on companies’ voluntary data submissions. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14, or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

www.bbj.hu

Budapest Business Journal | May 20 – June 2, 2022

Socialite Photo by Péter Kósa

Celebrating Another Hungarian Record Store Day

Budapest vinyl collectors like me have already enjoyed one Record Store Day (RSD) this year, back in April. We have another to look forward to on June 18. DAVID HOLZER

RSD began in 2007 in the United States to “celebrate the culture of the independently owned record store” and spread rapidly. Today, there are RSDs on every continent except Antarctica. The format of the day is the same worldwide: stores celebrate their place in their community by offering special vinyls, CDs and even cassettes that have been issued to mark the day. National and international stars meet and greet their fans. Stores hold fundraisers for non-profits that serve the community. This year, the hugely popular and almost hip American singer-songwriter Taylor Swift is RSD’s global ambassador, which gives you some idea of its cachet. In the early years, RSD was pretty much under the radar. But, after the 2016 event saw independent retailers record the highest percentage of vinyl album sales since Soundscan, the platform for tracking sales, was introduced in 1991, major labels woke up. Since then, they’ve been criticized for hijacking the event by releasing frankly indifferent material by legendary stars and monopolizing the capacity of recordpressing plants. Other complaints include stores often being forced to buy on a no-return basis, making them nervous about stocking some releases. Many limited releases are immediately resold online by collectors at ridiculously inflated prices. But, while those are valid complaints, for collectors, RSD remains an excellent opportunity to dig in those plastic crates stuffed with vinyl in search of their own personal holy grail or simply for albums that are irresistible even if you know absolutely zero about what’s on them.

Independent Appreciation

It’s also worth pointing out that criticisms of RSD began more than 10 years ago, and the event still goes from strength to strength, suggesting that more and more of us appreciate the place of independent record stores in our communities. That’s certainly the case in Hungary.

István Gyulai, RSD’s volunteer representative in Hungary, told me that “there’s been a visible increase in sales of vinyl since 2015. In that year, vinyl only accounted for 8% of sales. In 2021 it was 52%. Although vinyl sales in Hungary remain comparatively small (I’ve seen figures from the Association of Hungarian Record Companies that give a total of 228,000), labels and artists use RSD’s existence to shepherd fans to stores where they can buy limited releases by Hungarian bands like satirical hip-hop act Bëlga. Their limited RSD release and first-ever vinyl sold 300 copies in two hours.” Among the other Hungarian releases were cassettes by prog-metal band At Night I Fly and composer Adam Andras Horvath (who uses no accents on his name). While I understand the return of vinyl, I admit to being baffled by the resurgence of the cassette format. “Cassettes came back around 10 years ago, initially as part of the lo-fi scene. Independent labels love them because they’re easy to make, cheap and look good. Also, the 1980s, including its music and fashion, became cool again, as represented by the iconic TV series ‘Stranger Things,’” explained Gyulai. “Cassettes are connected to this, but they’re mostly decoration. In Hungary, cassette culture originated back in the day because it was the only way to listen to pirated music. Also, we had radio

Klinik that specializes in Hungarian, independent releases,” he explains. “I love record stores and I love records, so I just put a little effort into supporting the day. That means connecting labels and artists with stores, gathering the information necessary to maintain a website and social media presence, helping to organize in-store RSD appearances, doing a bit of press like this Participation Spreading and anything else that needs to be done.” In Hungary, 10 record stores officially He adds that the plan is to elevate the took part this year, four more than in event by reaching out to larger audiences. 2021. These were mainly in Budapest, “Lots of people in Hungary have no idea among them Wave and Musicland, which that RSD exists and many of them are were instrumental in launching RSD potential buyers and participants.” in Hungary, but they also included 777 Zenebolt in Dunaújváros (75 km south of the capital) and Néma Papagáj in Szeged You can find out more about the (176 km southeast). second Hungarian RSD at the “There was a really nice level of interest in Hungarian-language website the first Hungarian RSD of 2022 on April www.recordstoreday.hu. You 23. People queued up outside some shops could pick up a Keith Richards before they opened to make sure they got cassette, Miles Davis and their hands on limited RSD releases. Pearl Jam live albums, a Peter We also had DJs, acoustic performances, Gabriel triple LP or a Prince even a cocktail party,” Gyulai says. double. Stores will also probably Although Hungarian RSD also organize special events. Even received a boost when it was picked up if you’re not an especially rabid by the state-owned news agency MTI crate-digger, visiting one of the and mentioned on national TV this year, participating stores on June 18 for Gyulai, it’s mostly a labor of love. is a great excuse to check out “Before RSD, stores were doing things a Budapest neighborhood you independently. I’m involved because may never have visited before. I want to keep RSD alive locally. I’m co-owner of a boutique record label called

shows in Hungary where they aired the sound of computer games for ZX Sinclair Spectrum. You could record it at home and feed it to your ZX computer. This sounds pretty crazy nowadays, I guess.” Apart from RSD releases by local bands, “International RSD releases also go pretty fast,” Gyulai told me, “and we only have up to 10 copies of each release per store.”

www.bbj.hu

Budapest Business Journal | May 20 – June 2, 2022

Socialite | 23

Going Beyond the Borders and Back Again Pinceszer 2022 showcased wines made by ethnic Hungarian winemakers from neighboring countries, who collectively make a considerable contribution to the broader Hungarian wine scene.

Panorama of hills and vineyards near Eger in Hungary. Photo by Menno van der Haven / Shutterstock.com (Borászok Borásza) award for 2022, Vilmos Thummerer, who died at the age of 78 on Dec. 21, 2021, after a long illness, was born in Kárpátalja.

Labyrinth-like Cellar

ROBERT SMYTH

Ethnic Hungarians in the southern regions of Slovakia, known in Hungarian as the Felvidék (literally “Uplands”), have a huge impact locally, making wines from outstanding terroirs with considerable creativity and with plenty of organic, biodynamic and natural winemakers among them. One wine that stood out from this tasty pack, and would stand out of many a pack for its intensity and the distinctive winemaking behind it, was Amber 2018 from the Geönzeöl cellar, from the banks of the River Garam, a tributary of the River Danube and is known as the Hron in Slovakia. The area surrounding the river has a complex cocktail of soils, with the volcanic bedrock covered in limestone-rich clay. The proximity of the River Garam and the nearby Danube can lead to botrytis (also known as noble rot) forming, and Amber 2018 is made from botrytized Olaszrizling grapes that were spontaneously fermented on the skins to dry. Because of the very high sugar concentration brought about by the botrytis, this orange wine is way off the usual non-fortified wine scale with alcohol

17.5%.

It was then aged for three and a half years in 10-year-old American oak barrels. It was bottled unfiltered and has “some lees swimming around in it,” to quote winemaker Attila Geönzeöl, making it a little cloudy. While the alcohol does stick out a little, it has excellent body, concentration and tannins to match it, with notes of leaves, vanilla and cigars. It is currently only available from this uncertified organic cellar (www.granium.sk) and costs USD 20. I suggest you drink it like Fino sherry, the driest and palest of the traditional varieties. The least developed region where there are a significant number of ethnic Hungarian winemakers would have to be Kárpátalja, in western Ukraine, where the winemakers have struggled against under-capitalization. The posthumous winner of the Winemakers’ Winemaker

However, it was in the Hungarian region of Eger where he made his name. The former flower grower, who started making wine in 1984, built up an impressive estate and a large, cavernous, labyrinth-like cellar that is carved dramatically into the tuff cliffs and rock of Noszvaj, in a Tolkienian Middle Earth-like magical setting, some 13.5 km by road to the east of the city of Eger.

Superior 2015, one of the stars at the Eger wine region tasting held at Société Budapest on April 26. A wine like this justifies Kadarka being referred to as the “Hungarian Pinot Noir.” It was made from grapes in a nicely shriveled state and has a pale tawny color, with complex notes of tobacco, strawberry jelly and sundried tomato, and elegant fine-grained tannins. It costs HUF 5,540 from wineloverswebshop.hu. Kadarka vines were pretty much all grubbed up in Eger during the Socialist system due to it being difficult to work with, but it is making quite a comeback in the north-eastern region with wines like this.

The least developed region Deep Purple Another excellent wine at the tasting where there are a significant was Thummer’s Egri Syrah Superior number of ethnic Hungarian Válogotás 2016, which was varietally pure with a deep purple color and winemakers would have to peppery spiciness to go with the layered, be Kárpátalja, in western juicy black fruit and mouth-filling yet smooth tannins. Ukraine, where the The 2018 vintage of the Syrah won winemakers have struggled the best Syrah at the 2020 edition of Vinagora International Wine against under-capitalization. Competition, which was hosted in The voting for the Winemakers’ Winemaker for 2022, the 16th time the title has been awarded, commenced at the Hungarian Academy of Sciences on March 4, with the 50 best Hungarian winemakers nominated by the winners of recent years. On April 29, the nominated winemakers, with the one obvious exception of Thummerer, cast their votes to decide the winner. Incidentally, Thummerer also won the Hungarian Wine Academy’s Winemaker of the Year title back in 1995. The award was accepted by Thummerer’s granddaughter, Polett Pulay, who is already deeply involved in the winery as its export and office manager. Her grandfather long worked closely with the skillful and dedicated winemaker József Lamport. He oversees the production of around

600,000 bottles

a year from more than 110 hectares of vineyards. The quality is really consistent, with certain wines outstanding. An example of the latter is Egri Kadarka Grand

Budapest, and where I was one of the judges. In a remarkable performance, Thummerer also claimed the best Hungarian Cabernet Franc and Cabernet Sauvignons, with its Egri Cabernet Franc Superior Válogatás 2018 and Egri Cabernet Sauvignon Superior Válogatás 2018. The latter is quite a result as many would consider Eger too cool a climate for fully ripening the more internationally widespread of the Cabernets. However, it is getting warmer, and there a plenty of stunning vineyard sites that can adequately catch the warmth and the sun’s rays, such as Szomolya’s Nagyvölgy-tető vineyard from which this wine comes. For a review of Thummerer’s most famous wine, Vili Papa Cuvée, from the 2009 vintage, see the first issue of the Budapest Business Journal from this year. The best red wine overall at Vinagora 2022 was Pannonhalmi Főapátság’s Infusio 2019. This is the third time this fabulously layered and complex yet fresh MerlotCabernet Franc blend, which is only

made in top vintages, has won the red champion gong, the 2016 topping the

2019

competition,

and the 2017 the 2020 edition. The best white went to Varga Pincészet for its Aranymetszés Friss Sauvignon Blanc 2021. This huge Badacsony winery is often dismissed as a maker of plonk, but this award shows it can also make very serious wines. The team behind Borászok Borásza also has an eye on the future of winemaking and hands out a bursary of HUF 1 million to a fledgling vintner to get their career on track. The Future Winemaker award went to the newlygraduated winemaker Heni Trinfa, who told the BBJ that the bursary is “a huge opportunity, which has already led to lots of new acquaintances and my name has reached wonderful new places.” She added that it has opened the world up for her and will take her to a place she would never have imagined. She will soon travel to the Côtes-du-Rhône in France for a three-month internship at the Maison Plantevin winery.