Daimler boosts Hungarian investment plans

Daimler boosts Hungarian investment plans
By bne IntelliNews April 29, 2016

German car manufacturer Daimler announced on April 29 it will invest €595mn at its Hungarian production plant in Kecskemet. The plan bumps up the volume significantly after a €250mn investment in a new bodywork unit was announced in March.

The Mercedes builder sparked a tussle in Central and Eastern Europe in recent months as it discussed potential plans to place two new major plants in the region. The announcement that the Hungarian investment will be more than doubled could suggest at least part of that plan has now been abandoned.

That could be bad news for Slovakia and Romania in particular, which were previously reported to be in the running as possible locations for a new engine factory, and perhaps a new production centre. Officials in Warsaw claimed on April 25 that Poland is set to host the engine plant, although there has been no confirmation from Daimler.

The €250mn investment in a 99,000 sqm car body plant in Hungary should be completed in 2018. A further €344.6 will be spent on innovative machinery for existing product lines, as Daimler expects to expand its production capacity.

Daimler acquired a 441-hectare plot in Hungary in 2008, of which it currently uses only 160 hectares. The company originally planned to to use the remaining area to build a second plant to double capacity to 300,000 units, but that was derailed by the financial crisis.

Since 2012, when Kecskemet launched production of the Mercedes B-class model, Damiler has been suggesting it will look again at the plan. The company currently employs almost 4,000 workers.

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