Mercedes-Benz strengthens local-for-local strategy with opening of plant extension in Kecskemét, Hungary

On July 13, 2026, Mercedes-Benz held the official opening ceremony for the extension of its plant in Kecskemét, Hungary. In addition to key figures from Mercedes-Benz's leadership team, the event was attended by Hungarian prime minister Péter Magyar and the country's minister of economy and energy István Kapitány.

Mercedes-Benz's new electric C-Class is already in production in Kecskemét, and the company has confirmed that in the future it will also produce the electric GLC and a new compact G-Class at the site in Hungary.

On-site battery and parts assembly

Having expanded its footprint from 200 to 400 hectares, the home of the electric C-Class features two new halls for bodywork and assembly lines, as well as a new paint shop. But more importantly from a logistics and supply chain perspective, an on-site battery assembly facility was added to the plant as part of the extension.

This facility is located just a few hundreds of metres away from the vehicle assembly shops, with e-trucks delivering batteries along the short distances from the battery assembly plant to the north plant where the GLB is produced and to the new south plant where the electric C-Class is produced.

By assembling batteries on site, Mercedes-Benz is strengthening its 'local-for-local' approach while enhancing flexibility and supply chain efficiency. 

The battery cells are sourced externally and assembled on site into cell blocks, modules and complete packs.

"We are very proud that we have our own battery assembly facility here on site, just some hundreds of metres from the assembly shop," said Christian Dickert, Mercedes-Benz's head of production in Kecskemét. "Having the final battery assembly so close makes us more cost-efficient, saves some CO₂ and makes us more flexible in reacting to market demands."

Speaking to Automotive Logistics, Michael Schiebe, chairman of the board of management of Mercedes-Benz Group, added that bringing battery assembly closer to vehicle production is becoming an increasingly common industry trend.

"The battery is a big part – and in some cars it's even an integral part – of the whole structure of the car," Schiebe said. "So to assemble it very close to the production or assembly of the car only makes sense."

And it's not just batteries that are manufactured on site in Kecskemét; other key components including body parts are also produced at the facility. By bringing parts suppliers on site, Mercedes-Benz is able to significantly reduce logistics costs, strengthen resilience and cut down CO₂ emissions.

Furthermore, shortening the distance between component manufacturing and vehicle assembly creates a quicker feedback loop, making it easier for parts to be reworked if the team in the assembly shop notices any issues.

Flexibility in European production

Both the Kecskemét site and Mercedes-Benz's wider European production network have been designed for flexibility. On a plant level, Kecskemét allows for electric and ICE cars to be assembled on the same production line, allowing Mercedes-Benz to flex production volumes in line with consumer demand.

"Our job is to offer customers the best product and to give them choice," said Ola Källenius, chairman of the board of management of Mercedes-Benz Group. "That is exactly why flexibility matters so much."

And this flexibility extends beyond the plant itself to Mercedes-Benz's broader production network in Europe. Alongside its existing plant in Rastatt, Germany, the Kecskemét plant operates as part of the OEM's highly flexible "electric-first" Mercedes-Benz Modular Architecture (MMA) European production network.

This network creates flexible production links between Mercedes-Benz's footprint in Hungary and its other plants in Germany. For example, in the future it will be able to produce the electric GLC in Kecskemét or Bremen, according to demand.

The company has said that Kecskemét's close integration within the global Mercedes-Benz production network increases flexibility and efficiency while further strengthening its responsiveness to market demands and external influences.

Read more: Mercedes-Benz reshapes purchasing supply chain leadership

Mercedes-Benz Group AG has implemented senior leadership changes across procurement, supplier quality and supply chain, appointing Yanni von Roy-Jiang to lead procurement and naming Stefanie Choritz as her successor in supply chain operations.

Of course, this level of flexibility also requires Mercedes-Benz's supply chain to operate with the same level of flexibility. If production of a model shifts from Hungary to Germany – or vice versa – Mercedes-Benz's suppliers and logistics partners must be prepared for a seamless transition to the new location.

This means coordinating with suppliers on shifting inbound supply from one location to another, and having trusted relationships with logistics service providers to be able to adapt logistics operations accordingly. And from a finished vehicle perspective, moving final assembly between plants also means the finished vehicle network must be redesigned to ensure cars can still reach their destinations on time.

Achieving true flexibility requires the same level of agility throughout the value chain. Without this, bottlenecks will almost certainly arise.

Optimisation of plant logistics

Logistics optimisation was a key part of the project extending the plant in Kecskemét. In terms of transport infrastructure, the plant benefits from direct access to Hungary's rail network and since May 2025, 10.5km of new roads have been constructed around the site.

In the new body shop, there is 65,000 sq. m of production space, with 20,000 sq. m reserved for logistics space. And in the largest building of the expansion – the new assembly plant – there is 67,000 sq. m of production space and 42,000 sq. m of logistics space, including an integrated industrial park.

As Patrick Walz, senior project lead on the Kecskemét expansion at Mercedes-Benz, shared, one of the "key success factors" at the site is its optimised logistics processes. He noted that logistics areas are deliberately located close to installation points for the shortest possible supply route.

In an interview with Automotive Logistics, Walz said that reducing complexity has been key to optimising logistics in Kecskemét. "We have really efficient logistics routes in the hall and that makes it quick and efficient," he added.

Around one third of the assembly hall is dedicated to logistics. Additionally, there is a trailer yard directly connected to the assembly hall and suppliers are directly connected within the industrial park.

Through its 'One-Roof' approach, whereby seats and wiring harnesses are produced by directly connected suppliers and delivered to the line without additional intermediate storage, Mercedes-Benz has been able to eliminate the need for additional handling, minimise transit times and reduce the carbon footprint of its parts transportation operations.

"This gives us currently the most efficient logistics processes within our Mercedes-Benz production network," Walz stated.

The site features automated guided vehicles (AGVs) to further improve and automate logistics processes, and digital technology has also played a significant role in optimising on-site logistics. "Every single station is simulated and calculated on a KPI-based logic," Walz explained. 

The prime minister's perspective

The event was one of great significance not just for Mercedes-Benz, but also for the country of Hungary, with the extension making Kecskemét the largest plant in Mercedes-Benz's European network and its second-largest globally, behind China.

Prime minister Magyar described the plant extension as a powerful symbol of the partnership between Germany and Hungary – a partnership which he said was built on shared knowledge, shared work and shared success. He acknowledged the plant's value to the Hungarian economy and noted that Mercedes-Benz is one of the largest and most important employers not just in the city of Kecskemét and in the wider Bács-Kiskun County, but in the whole country.

"Mercedes-Benz's presence strengthens Hungary's position within the global automotive value chain and demonstrates that our country is capable of hosting long-term industrial investments of strategic importance," Magyar said, in a speech delivered in Hungarian and translated to English.

The prime minister explained that one of the goals of the newly elected Hungarian government is to maintain a reliable partnership with companies like Mercedes-Benz while attracting new investment by providing a stable economic environment, a competitive tax system, modern infrastructure and a skilled workforce.

But he also said that a partnership must work in both directions, and claimed that his government's goal is not simply to create jobs, but to ensure that honest work provides a secure livelihood – making sure the country's blue-collar workers are entitled to fair wages, safe working conditions and adequate time for rest just as much as top executives are.

"What we see here today in Kecskemét is not merely additional manufacturing capacity," Magyar remarked. "We also see an opportunity for Hungarian companies to participate at a much higher level in the value chains that ultimately produce a new electric vehicle rolling off the assembly line."

Recounting the story of Béla Barényi – an Austro-Hungarian engineer often referred to as "the father of passive safety" who was hired at Mercedes-Benz after boldly telling his interviewers that they were doing everything wrong – Magyar shared his view that today's leaders in business and in politics must never lose their willingness to learn.

He encouraged Mercedes-Benz to continue to give opportunities to "the Béla Barényis of the future" that may one day knock at the doors of Mercedes-Benz's plant in Kecskemét with fresh and valuable ideas – though whether or not they are so bold in their assertions as Barényi is said to have been remains to be seen.

Sustainability at the Kecskemét site

Mercedes-Benz made sure that the extension project in Hungary was consistently aligned with its sustainability goals. At the heart of this is the site's photovoltaic systems: a 240,000 sq. m open-space solar park as well as photovoltaic systems on the roofs of the new battery assembly, body-in-white and final assembly halls.

The solar park alone has a capacity of 27.4 MWp and together with the roof panels, these systems have a total capacity of 42.3 MWp. This accounts for roughly 25% of the Kecskemét site's annual energy requirement.

Register today for Automotive Logistics & Supply Chain Global

22-24 September | St John's Resort, Plymouth, MI

In the interest of biodiversity, Mercedes-Benz has also turned unused land, such as the area between the solar park and the battery assembly plant, into wildflower meadows and environments for local wildlife. Leftover construction materials from the extension were used to create a safe nesting wall for sand martins in an effort to protect the local bird population.

Walz told Automotive Logistics that Mercedes-Benz's investment in these projects in Kecskemét is a statement that the company remains committed to its sustainability goals, noting that sustainability is a key factor when it comes to planning.

He also noted that reducing energy consumption per vehicle produced is a personal target of his – set and monitored by the Mercedes-Benz board of management.