Daimler in talks to move more production to new plant in Hungary
German carmaker Daimler is in talks with Austrian-Canadian machinery maker Magna on moving production of the Mercedes G-Class sport utility vehicle to Hungary, Austrian daily Kleine Zeitung said on Thursday, citing a Magna official.
If Magna does not agree on changed conditions, Daimler could move production of the vehicles to its new plant in Kecskemet, central Hungary, in 2013, the paper said. Daimler wants an answer from Magna on the matter by the end of January, it added.
Magna CEO Gunther Apfalter confirmed the talks were underway and told the paper he trusted production of the vehicles would remain in Graz.
Another Austrian newspaper, Kurier, said Magna was "thinking hard" about opening a new base in Central Europe, in part because of the talks with Daimler.
Mr Apfalter conceded production costs were lower in Hungary than in Austria - per-hour labour costs in Hungary are about €9 compared to €24 in Austria - but he said Magna wanted to keep the plant in Graz.
Magna made about 7,200 G-Class vehicles in 2011 and the number is set to rise to 8,500 in 2012. By 2013, production numbers could climb to 10,000.
Magna already has about 150 employees in Hungary.
Daimler is building a €800m compact car plant in Kecskemet. The first serial production model is set to roll of the line in Q1 2012.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.