Mercedes made in Hungary

Automaker Daimler of Germany on Thursday opened a new Mercedes-Benz factory in Kecskemet, Hungary - the first of its kind in Eastern Europe.

"We are making history today," the plant's Managing Director Frank Klein said during the official inauguration ceremony. It took Daimler only four years to kick off production after the location decision was made back in 2008.

The plant in Kecskemet, southeast of the capital Budapest, is due to build up to a capacity of between 100,000 and 120,000 units annually and will employ at least 3,000 people in the final phase, up from 2,500 at present.

Investment part of expansion drive

The factory cost Daimler 800 million euros ($1.06 billion). Rolling off the assembly lines right now are B-class compacts, but Mercedes said on Thursday it planned to expand production to other models in the near future, for instance a completely new four-door CLA sport sedan.

"Mercedes is going on the offensive," Daimler Chief Executive Dieter Zetsche commented on the company's product range extension. "We are providing high-quality, sustainable jobs in the area, and we will engage in training and qualification schemes. This makes us an attractive investor here," Zetsche told DPA news agency.

Hungarian Prime Minister Viktor Orban, who attended the opening ceremony, welcomed the new plant in Kecskemet. After all, it's expected to give a significant boost to a struggling economy, fighting to avoid recession.

Daimler's engagement is one of the largest in recent Hungarian history, aside from an Audi car factory in Gyor west of Budapest.

The cash-strapped Orban government has been courting foreign investment for years and is still seeking a 20-billion-euro standby loan from the European Union and the International Monetary Fund (IMF), but Brussels first wants Orban to change some of his laws which it believes undermine democracy and give him a dangerous amount of power.

hg/mll (AFP, dpa)