Mercedes Benz to be manufactured in Hungary by 2012

Mercedes Benz will construct a small car plant in Hungary by 2012.

The car giant has inked an agreement with the Hungarian government to construct a Mercedes-Benz small car plant in Kecskemet. The deal includes an investment of Euro 800 million and the creation of up to 2,500 jobs. The plant will manufacture over 100,000 compact cars annually beginning in 2012.

Mercedes Benz’s first factory is part of the company’s plans to expand production of its A and B class small car models.The Stuttgart-based manufacturer of cars and trucks including Mercedes-Benz luxury cars, had in 2007 sold off a majority stake in the Chrysler Group to private equity company Cerebus for US$7.4 billion.

The Hungarian plant will build Mercedes Benz models ensuring that they all meet the highest quality standards, the company has said. The plant is said to have in it all that would contribute to the profitability of the product portfolio extension.

Mercedes-Benz is building the plant in order to create additional production capacity in the compact car segment, where the model range will be expanded from two to four vehicles, the car maker said.

The deal with the Hungarian government was signed between Rainer Schmuckle, chief operating officer of Mercedes-Benz Cars, and Gordon Bajnai, Hungarian minister for national development and economy, said a report.

Meanwhile, Mercedes-Benz will be launching its first passenger car model equipped with a hybrid drive system in the summer of 2009. The company said the model, named S 400 BlueHYBRID, will be a combination of a modified V6 petrol engine and a compact hybrid module.

This car is being tipped as the world’s most economical luxury saloon with a spark-ignition engine. The car will also house a 3.5-litre petrol engine that develops an output of 205 kW/279 hp, while the electric motor generates 15 kW/20 hp and a starting torque of 160 Nm. The result is a combined output of 220 kW/299 hp and a combined maximum torque of 385 newton meters.

The new S 400 BlueHYBRID is the first series-production model to be equipped with a particularly efficient lithium-ion battery specially developed for automotive use. This is another major contribution by Mercedes-Benz to the electrification of the car, the company said.