Mercedes-Benz is rapidly expanding its Hungarian operations, where production costs are 70 percent lower than in Germany, while simultaneously cutting jobs and capacity at its home base.
The automaker's Kecskemét factory has doubled annual capacity to 400,000 vehicles, making it Mercedes' largest European production site and second only to Beijing globally.
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Cost Advantage Drives Expansion
Mercedes calculates Hungarian production costs are 70 percent cheaper compared to Germany, according to Handelsblatt.
Eurostat figures put industrial labor costs at €49.50 ($56.60) per hour in Germany versus just €15.60 ($17.80) in Hungary.
Hungarian employees also work significantly more hours annually due to fewer public holidays and a standard 40-hour work week, while German auto workers have been on 35-hour weeks since the mid-1990s.
The Kecskemét plant, which built its first car 14 years ago, currently employs around 5,000 people and is adding another 3,000.
Premium Models Head to Hungary
The C-Class is now being assembled in Hungary alongside the GLB, while the upcoming compact G-Class will be produced exclusively there.
The GLC, Mercedes' best-selling model line, is also planned for the factory.
Back in Germany, around 18,000 workers recently protested after Mercedes tightened its cost-cutting plans.
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Management wants labor costs down, including reviewing special payments and getting more from employees for the same money.
Mercedes isn't alone. Volkswagen has shifted Passat production to Slovakia, and European Golf production is heading to Mexico in 2027.
