Mercedes-Benz will produce its upcoming baby G-Class at its expanded plant in Hungary, not in Germany, according to a new report.
The decision is driven by cost-cutting measures.
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Production Shift to Hungary
The smallest G-Class ever is expected to enter production next year.
It will be built at Mercedes' Kecskemet facility in Hungary, where the company is nearly doubling capacity to between 300,000 and 400,000 vehicles annually.
The plant will also increase its workforce to roughly 7,500 people, up from 3,000.
In addition to the baby G-Class, the site will produce the new electric C-Class, the GLB, and the combustion-powered A-Class.
Labor costs in Hungary are lower than in Germany, making the location more economical for a smaller vehicle with typically lower margins.
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Powertrain Options
The baby G-Class will arrive with both hybrid and all-electric powertrains.
Originally planned as an EV-only model, Mercedes reversed course due to cooling electric demand and the axing of the US federal tax credit.
The all-electric version is expected to feature an 85 kWh NMC battery and dual electric motors, with a driving range of up to 450 miles (724 km).
The hybrid variant may use a 1.5-liter engine with electric assistance, similar to the CLA sedan, producing a combined 208 hp and 280 lb-ft of torque.
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Mercedes may unveil the new model on July 13th, coinciding with an announcement about the factory expansion.
