German carmaker Mercedes-Benz Group has started manufacturing its fully electric GLB compact SUV at its Kecskemét facility in Hungary.
According to a report by Bloomberg, the decision reflects the carmaker’s efforts to reduce costs as it faces mounting tariff risks and stronger competition from Chinese vehicle manufacturers.
The electric GLB, priced from around €59,000 ($68,570), will now be built in Hungary as Mercedes consolidates production of the model there, moving output away from Mexico.
The company has also brought B-Class tourer production to an end at its Rastatt plant in Germany, with manufacturing ceasing at the end of last year.
In parallel, Mercedes plans to relocate part of its mid-range C-Class sedan production to Hungary later this year, targeting a cost structure that executives have said is less than half of that in Germany.
In addition, the electric version of the C-Class, currently assembled in Bremen, is scheduled to transfer to the Hungarian site.
These manufacturing changes come as Mercedes works to stabilise its operations amid softer demand for premium vehicles in China and the threat of additional US tariffs.
At a press conference, Mercedes production chief Michael Schiebe said: “The batteries we put in this car come right from the battery facility we have here on site. This reduces the transport times, the routes. This gives us big, big advantages.”
Recently, US President Donald Trump warned of further levies on goods from eight European countries, including Germany, linked to a dispute involving Greenland.
Earlier in the week, he outlined plans for import duties of 10% from February, rising to 25% in June, the report said.
In its latest third-quarter report, Mercedes Benz Group delivered softer performance, with declines in both revenue and earnings across its core business segments.
Group revenue fell 7% to €32.14bn ($37.37bn), while EBIT declined 70% to €750m, reflecting reduced gross profitability and significant special charges.
Expansion at Kecskemét will make the Hungarian plant Mercedes’ “second-largest” globally, after its Beijing operation, which it runs in partnership with BAIC Motor.
