Mercedes-Benz is to plough EUR580m (US$672m) into its plant in Kecskemét, Hungary, to produce the next generation of the automaker’s compact cars.

In addition to a new body shop, the cash injection will see capacity expanded.

“Kecskemét is and will remain a cornerstone of the compact vehicle production compound,” said Mercedes-Benz cars head of Compact Vehicle Production, Michael Göbel.

“Its expansion for the next generation of compact vehicles will further strengthen this role within the international production compound.”

For his part, Mercedes-Benz Manufacturing Hungary site manager, Christian Wolff added: “This investment is a clear sign of our commitment to this location and offers good future prospects for the employees in Kecskemét.

“We will also invest in the improvement of the ergonomic and working conditions, as well as in the qualification of the workforce.”

GlobalData Strategic Intelligence

US Tariffs are shifting - will you react or anticipate?

Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.

By GlobalData

Around EUR250m will be for the new body shop, which is being built on an area of 99,000 square meters.

Other parts of the plant, for example the press shop, will also be expanded as part of the total investment, while the production line will receive adjustments and robots for surface treatment.

In the final assembly section for the next generation of compact vehicles, materials will now be brought to the assembly line in pre-picked baskets of goods.

This will be carried out autonomously by driverless transport vehicles with prepared baskets of goods from the logistics and picking zones.

Just Auto Excellence Awards - Have you nominated?

Nominations are now open for the prestigious Just Auto Excellence Awards - one of the industry's most recognised programmes celebrating innovation, leadership, and impact. This is your chance to showcase your achievements, highlight industry advancements, and gain global recognition. Don't miss the opportunity to be honoured among the best - submit your nomination today!

Nominate Now