Daimler has started production of the Mercedes-Benz CLA coupé model at its €800m ($1.08 billion) Kecskemét facility in Hungary following its debut at the recent Detroit Auto Show. It is the first model to be exclusively made there and joins the B-Class, production of which began in March last year when the plant opened, but which is also assembled at the Ratstatt plant in Germany.

The move has increased the number of suppliers and supporting logistics activity to the plant. It is also part of Daimler’s aggressive new model launch programme, which will see ten new models by 2015, as the company aims to retake the top premium brand sales spot from BMW and Audi by 2020 – a plan which the company anticipates will create significant inbound and outbound logistics demand and require further changes to its distribution networks (read more here).

Daimler would not reveal its production targets or capacity for the CLA at Kecskemét but said that the new generation of Mercedes-Benz compact cars and the corresponding growth of the product portfolio to five new models from two had created the need for additional production capacities and hence a second production plant. Daimler has earlier revealed that the production capacity at the Hungary plant reached 100,000 annual units in 2012.

As well as B-Class production at Kecskemét and Rastatt, A-Class production started in the latter plant in July last year and a production of a compact SUV will begin there at the end of the year. Daimler has also reached an agreement for contract manufacturer Valmet to build 25,000 units of the A-Class per year starting in 2013. The company said it would announce details regarding a fifth model at Rastatt at a future date, creating a significant compact car production network between the three locations.

“The decision in favour of Hungary… was the result of a long and thorough selection process,” said a spokesman for Mercedes-Benz Car Operations. “Daimler chose this location because – overall – the high qualitative and quantitative requirements for a successful establishment of a Mercedes-Benz production site are met.”

According to the company, these requirements include the availability and condition of land, road and rail infrastructure, the availability of resources, a supplier footprint, as well as the availability and qualification of human resources.

Daimler has now increased to 25 the number of production material suppliers in Hungary since the start of CLA production, up from 17 since the beginning of B-Class production started there. Six of those are based on site, two in less than 10km distance and a further 17 in other parts of the country. The rest of the suppliers are mainly based in Germany and wider Western and Eastern Europe.

In terms of logistics provision for the handling of supplier material, Daimler is working with five providers: Duvenbeck, Kühne+Nagel, Panopa, Lagermax and Rhenus Logistics.

Duvenbeck, which is already the trailer yard provider at the Ratstatt plant and dedicates more than 50% of its 1,000-strong trucking fleet to Mercedes, also manages the trailer yard at Kecskemét, involving the intermodal shift from rail to road and the internal just-in-sequence shipments between the supplier park and the assembly line for such components as front modules, exhausts and tyres, amongst others. It also sequences wire harnesses and inner door trim inhouse from three suppliers and for glass, suspension parts, bumpers and others for a total 12 clients in their own warehouse just opposite the truck entrance.

“Our ability to listen very carefully to our clients, paired with our absolute pro-active approach and the advantage of having very flat hierarchies with extremely fast decision processes led to a quick increase of additional customers,” said the company's owner Thomas Duvenbeck.

Duvenbeck has its own 5.000m2 facility, built in time for the start of B-Class in September 2011, which it is now expanding to encompass a total warehouse space of 12,000 square metres for internal suppliers to Mercedes.
“The big diversity we were able to achieve, with an increasing assembly proportion in the contracts, is an especial milestone in this development,” Duvenbeck told Automotive Logistics News.

Kuehne + Nagel has been handling inbound materials from an adjacent facility to the body shop and final assembly line. Tasks involve operating supplier and production storage areas, as well as picking and feeding to the production line using kanban and just-in-sequence systems (read more here).

At a ceremony marking the start of CLA production, Mercedes-Benz’s plant manager, Frank Klein, said that the team at Kecskemét were eager to get the CLA to customers “as perfectly as the B-Class was built”. The plant produced 40,000 of that model in 2012.

The addition of the model means 500 new jobs at the Hungary plant, bringing the total workforce to 3,000.

At the production ceremony, head of Mercedes-Benz Cars and chairman of Daimler’s Board of Management, Dr Dieter Zetsche explained that the CLA was based on the Concept Style Coupe, introduced last year that he said had generated a lot of interest for series production.

Left to right: Dr Dieter Zetsche, chairman of the Daimler Board of Management and head of Mercedes-Benz Cars; Victor Orbán, prime minister of Hungary, and Frank Klein, head of the Mercedes-Benz Kecskemét plant.