Daimler picks Hungary for its next compact car plant

0 Comments | AFP, June, 2008

FRANKFURT (AFP) — German auto giant Daimler ended several months of suspense Wednesday with a decision to build a new auto factory for small Mercedes models in Hungary.

Daimler said it would invest about 800 million euros (1.2 billion dollars) in a plant in Kecskemet, 80 kilometres (50 miles) southeast of Budapest, dashing hopes in Poland and Romania that they might host the new site.

An existing German factory would also get 600 million euros in investment in a plan to boost output of smaller, cleaner Mercedes brand cars, a statement said.

The group aimed "to sustainably boost its competitiveness, as well as to access new markets and create additional production capacities."

Hungarian Prime Minister Ferenc Gyurcsany welcomed the news, hailing it as...