The Hungarian Competition Authority (GVH) has recently completed a rapid sector investigation focusing on the vehicle procurement market. The investigation revealed a decline in the number of single-bid procurements between 2021 and 2023, aligning with the government's commitments to the European Commission.

In a draft report released for public consultation, GVH experts proposed measures to further reduce single-bid procurements and enhance market competition. The authority emphasizes the importance of competitive bidding in public procurement processes, as a lack of competition can lead to inflated prices and inefficient use of public funds.

The Hungarian government adopted an action plan in early 2023 aimed at increasing competition in public procurement, with a specific goal of significantly reducing the proportion of single-bid procurements. The GVH has been tasked with conducting three sector investigations to uncover the reasons behind the prevalence of single-bid procurements.

The rapid sector investigation is a procedure established under competition law to identify market problems that indicate distortions or restrictions in competition, necessitating urgent intervention. The GVH collected mandatory responses from market participants to analyze the detailed causes of competition distortion and propose necessary actions.

During the investigation, the GVH conducted unannounced on-site inspections at major players in the domestic market for passenger and commercial vehicle sales. The authority also requested written data from numerous companies involved in vehicle importation and sales, as well as from relevant industry associations and public and private procurement entities.

The findings indicated that procurers generally strive to ensure the highest number of bids possible, primarily by conducting preliminary market consultations and avoiding overly narrow technical specifications. Consequently, the number of single-bid procurements has steadily decreased during the examined period.

However, temporary factors, such as disruptions in vehicle manufacturing and supply chains due to the COVID-19 pandemic, were identified as potential reasons for a decrease in bids during certain procurements, leading to single-bid awards.

The GVH experts identified significant untapped potential in the vehicle procurement sector, noting that many dealers are currently opting out of tenders due to the strong private sector demand and significant differences in practices between private sales and public procurement.

Based on the investigation's findings, the GVH has formulated recommendations for procurers to further reduce the number of single-bid procurements and enhance market competition. The draft report has been made available for public consultation until June 6, 2025, allowing market participants to submit written comments.