Benz plans two new compact cars

MERCEDES-BENZ will introduce two distinct new compact cars to join its next-generation A-class and B-class models.

As part of its plan to increase production in the ultra-competitive segment, Daimler AG announced last week that it would invest about €800 million ($A1.3 billion) and create up to 2500 jobs at a new plant in Kecskemet, Hungary.

The Kecskemet plant will form a “production network” with the German manufacturer’s existing compact-car plant in Rastatt, Germany, for which Daimler also last week earmarked for a €600 million ($A980 million) upgrade “in the context of the expansion of its product portfolio”.

According to Daimler chairman and head of Mercedes-Benz Cars Dieter Zetsche, the still-to-be-specified new model variants will “win additional target groups” for the Mercedes-Benz brand.

“Mercedes-Benz is going to offer an even wider range of exciting premium cars – with the high levels of comfort, safety and overall quality that are characteristic for the brand – in the particularly fuel-efficient compact-car segment.

“Moreover, our expanded product range will allow us to tap into new customer groups and open up new market regions,” Dr Zetsche said.

The company said there would be a high level of technical integration among the four new compact vehicles “which are also going to benefit from the modular system used by the other Mercedes passenger-car model series”.

A case in point is the new generation of four-cylinder diesel engines that will debut later this year.

The move to Eastern Europe, which has cheaper labour costs than in Western Europe, sees Mercedes-Benz follow other prestige brands such as Audi, Volkswagen and PSA Peugeot-Citroen.

“In terms of all business aspects, the future plant in Kecskemet clearly offers the best perspectives. The site meets all the high quantitative and qualitative requirements for the successful establishment of a Mercedes-Benz production,” said Mercedes-Benz Cars chief operating officer Rainer Schmückle.

“Of course, both sites (Kecskemet and Rastatt) have to contribute to the cost-effectiveness of our involvement in this vehicle segment which is the subject of very intense competition.”

Meanwhile, a Reuters report has quoted Dr Zetsche as saying that Daimler AG plans to introduce an electric vehicle for its Mercedes brand and an electric version of the Smart micro-hatch in 2010.

“We plan an electric Smart for 2010 and for the same year a Mercedes (electric) model as well,” Dr Zetsche told German newspaper Frankfurter Allgemeine Zeitung.

The report said Dr Zetsche also aimed to bring a small series of fuel cell cars to market in 2010.