Daimler to Build Auto Factory in Hungary

Production at the plant in Hungary is scheduled to begin in 2012 and will create 2,500 jobs.

Daimler said June 18 it would build a factory in Hungary and invest in an existing German plant to boost output of smaller, cleaner models. The facility in Hungary will be built in Kecskemet, 50 miles southeast of Budapest, at a cost of about 800 million euros (US$1.2 billion).

The group said it aimed "to sustainably boost its competitiveness, as well as to access new markets and create additional production capacities." Production of the plant is scheduled to begin in 2012 and will create 2,500 jobs.

Meanwhile, Daimler will also invest 600 million euros in a site in the German city of Rastatt which already produces Mercedes class A and B cars. "Mercedes-Benz will have an even stronger presence in the compact-car segment in the future, with a product line-up of four instead of today's two vehicles," the statement said. Proposed stricter European Union carbon dioxide emissions levels and climbing oil prices have sparked moves by auto manufacturers to increase output of such vehicles.

Capacity at Daimler's Rastatt factory of around 280,000 units "would be exploited, and that of Hungary would come on top," the spokesman added.

Copyright Agence France-Presse, 2008

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