Daimler picks Hungary for new Mercedes plant

2009 Mercedes Benz B-Class

Daimler has chosen the city of Kecskemet, central Hungary, for its new plant as it expands its lineup of entry-premium cars to four models from two.

Company insiders say that the new Hungarian plant will build an SUV variant that would rival BMW's planned X1.

The German automaker said it would invest 800 million euros into the new plant, which will be 80km from Budapest. The plant will create 2,500 jobs.

"We are planning a new plant in Hungary to boost our competitiveness and to gain access to potential of the Eastern European markets," Daimler CEO Dieter Zetsche said in a statement.

The carmaker also will invest 600 million euros in its plant in Rastatt, Germany, which currently builds A- and B- class cars.

There is also speculation that a coupe model will be added to the model lineup.

Daimler said there would be a high level of technical integration among the four entry-premium cars, which would share a modular system used by other Mercedes models such as the new generation four-cylinder diesel engine making its debut later this year.

The carmaker expects to sign a memorandum of understanding in the coming weeks regarding the new plant in Kecskemet.

Kecskemet beat rival sites in Poland and Romania.

[Source : Automotive News(Subscription Required)]

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