Mercedes-Benz has announced a €1 billion investment to expand its manufacturing plant in Kecskemét, Hungary, doubling the facility's production capacity as the company strengthens its competitiveness amid accelerating technological transformation and rising global market competition.

According to Reuters, the expanded plant will manufacture the next-generation all-electric C-Class, becoming Mercedes-Benz's largest production facility in Europe and its second-largest globally, while providing greater flexibility to respond to changing market demand.

Production Capacity Doubles

The Hungarian government stated that the expansion will increase the plant's annual production capacity to 350,000 vehicles and create approximately 3,000 new jobs.

As of the end of May, Mercedes-Benz employed nearly 5,200 people at the Kecskemét facility.

Strengthening Localized Production

Mercedes-Benz CEO Ola Källenius emphasized that localizing the production of key components, including batteries, will enable the company to respond to market demand more quickly and efficiently.

He described the Kecskemét plant as a strategic production hub that will play an increasingly important role in supporting the company's long-term global manufacturing strategy.

The facility is also scheduled to produce the upcoming all-electric GLC and the compact G-Class, further expanding its product portfolio.

Flexible Global Manufacturing Network

Michael Schiebe, Member of the Board of Management responsible for Production, said the Hungarian plant will operate in close coordination with Mercedes-Benz's German factories through a flexible manufacturing system.

This multi-plant production strategy will allow the company to build different vehicle models across multiple locations, improving responsiveness to market fluctuations while strengthening the resilience of its global manufacturing network.

Hungary Continues to Attract Automotive Investment

Hungary has become one of Europe's key automotive manufacturing hubs, supported by competitive labor costs, established supply chains, and continued investment from both international automakers and battery manufacturers.

The Hungarian government reaffirmed its commitment to providing a stable and predictable business environment for foreign investors while emphasizing that companies operating in the country must comply with local regulations, maintain workplace safety, and provide fair wages for employees.

Mercedes-Benz's latest investment further reinforces Hungary's strategic role in Europe's electric vehicle manufacturing landscape and highlights the industry's continued shift toward localized production and flexible global supply chains.