Daimler May Shift G-Class Output to Hungary

VIENNA – Production of the Mercedes-Benz G-Class may be moved from the Magna Steyr Fahrzeugtechnik plant in Graz, Austria, to Daimler’s new plant in Hungary,the Kleine Zeitung, a daily newspaper published in Graz, reports.

Daimler reportedly is asking for a new contract from Magna Steyr that would lower costs, otherwise it may build the G-Class at the new Mercedes-Benz Mfg. Hungary plant in Kecskemet starting in 2013.

Magna Steyr President Guenther Apfalter has confirmed to Austrian media the company is in talks with Daimler about the future of G-Class production.

Daimler wants Magna Steyr to make a decision by Tuesday, the newspaper reports.

Magna Steyr has a contract to manufacture the G-Class until 2015, but Daimler has the right to cancel the deal at the end of every year, reports say.

The Austrian plant produced 7,228 G-Class vehicles last year, up 30.7% from 2010. Plans call for 8,500 units this year, and annual output could grow to 10,000 vehicles in coming years, Kleine Zeitung says.

Magna Steyr appears close to signing a contract involving production of military vehicles for Algeria, and similar negotiations are under way with Australia and Tunisia.

The G-Class was co-developed by Austria’s Steyr-Daimler-Puch, the previous owner of the Graz plant, and Daimler. The company began building the G-Class in Graz in 1979. Nearly 220,000 of the vehicles have been produced since then.

Daimler has completed construction of a new car plant with a 100,000-unit annual capacity in Kecskemet, about 53 miles (86 km) southeast of Budapest. Initial plans call for output of two front-drive Mercedes models.

Volume production of the new Mercedes-Benz B-Class, which has been built in Germany since fall 2011, is expected to be launched in Kecskemet next month. The second model, which is to be produced solely in Hungary, will follow at a later date.