Mercedes set to invest billions in German, Chinese and Hungarian plants

Mercedes-Benz will invest billions of euros to modernize its plants in China, Germany and Hungary over the coming years, Automobilwoche, a sister publication of Automotive News Europe, reported, citing Jörg Burzer, the automaker’s production chief.

“We are investing a three-digit million amount per plant for the run up,” Burzer told AMW in an interview, adding that these investments will primarily be at the plants in Beijing; Rastatt, Germany; and Kecskemet, Hungary.

The automaker will start work on the Rastatt plant over the summer and will produce the first model on the new compact vehicle platform MMA starting in 2024.

The new architecture is designed for electric drives but can also accommodate a combustion powertrain.

The number of compact models produced at the German factory will be cut to four from seven, Burzer said.

Mercedes will also invest a low single-digit billion euro sum in modernizing the paint shops in Rastatt and fellow German plants Sindelfingen and Bremen.

The report said the modernization aims to cut energy and water consumption at the factory and reduce its reliance on natural gas.

As Sindelfingen is the oldest of the plants, its paint shop will be modernized first, making it ready for two new sports car models based on the automaker’s AMG.EA electric platform.

A midsize model based on a third all-electric architecture, MB.EA, is also planned for Kecskemet, Burzer said.

Mercedes is also considering expanding its U.S. plant in Tuscaloosa, Alabama, where it can benefit from government subsidies under the Inflation Reduction Act, Automobilwoche said.

“We are looking at what happens with the IRA. The framework conditions worldwide are always changing, and we have to react to that if necessary,” Burzer said.

Mercedes is currently preparing its global production network for its next generation of full-electric vehicles on new platforms.

The lineup in Europe and China is largely determined, but it is still unclear what will happen to plants in South Africa and Mexico.

South Africa is at capacity with the C-Class, Burzer said, while the GLB SUV is coming off the production line in Mexico.

Mercedes has said it will be ready to go all-electric by the end of the decade, where market conditions allow.