Mercedes Benz, the German automotive giant, has opened the doors of its new production unit in Hungary, which is currently its only plant in Eastern Europe. The company invested a total of € 800 million ($ 1.06 billion) in developing the factory situated in Kecskemet, which is located 100 km (62 miles) away from the national capital Budapest. With this facility, the auto maker will provide employment to 3,000 people and give rise to 10,000 additional jobs among suppliers.
The new plant was inaugurated in the presence of Hungarian Prime Minister Viktor Orban; Dieter Zetsche, the Chief Executive Officer of Daimler AG (the owner of Mercedes Benz); and the head of this facility, Frank Klein. The company has decided to use this unit to assemble the B-Class range of cars. According to Zetsche, “This plant is an important milestone of our growth strategy. Kecskemet is a model plant, an ideal factory in flexibility, efficiency and quality. We are setting new standards.”
With installed capacity of 1.2 lac units per year, the plant has come forward as one of the biggest direct investments of all times in Hungary. It has become a symbol of hope for the nation, which is battling a bad economy, and is the largest one among all the projects being undertaken by car makers here. Leading international automotive brands like Audi, BMW, Opel and General Motors Europe are presently bolstering their respective plants in the East European country.
Daimler had committed itself to this plant under the regime of a different Hungarian government, which had offered sops worth 30 billion forints (€ 101 million or $ 135 million). The company followed through with the project as the present administration ensured that unfavourable situations did not arise, thus dispelling any types of doubts regarding the investment. Talking about the 441 hectare (1,090 acre) plot, which was earlier used for farming, Zetsche commented, “We selected this site from a number of alternatives in Hungary and other countries. We are as happy with the selection today as we were when we made it.”
The head of Daimler was optimistic about the future of car production, despite a 9 per cent fall in sales of cars in Europe during January and February 2012 on Year over Year (YoY) basis. At the event, Zetsche stated that the global economy was heading towards a slump when the company commenced building this unit in 2009. He said, “There were more than a few experts who said the automotive industry would never return to the level before the crisis, let alone experience growth. These experts have been proven wrong.”
Mercedes Benz recorded its best year since inception in 2011, with sales of 2.1 million units and revenues worth € 106.5 billion ($ 141.3 billion). Backed by the expertise and experience of its 2.71 lac employees, the company will endeavour to further improve these figures in 2012.
According to Orban, Daimler appeared set to take up the role of a long term investor in the country. He stated, “This is not an investment, it’s an alliance. I hope Mercedes in Kecskemet will be a new chapter in the great history of German-Hungarian economic cooperation.” Presently, car production is responsible for 10 per cent of Hungary's economic output.
