Mercedes-Benz builds its compact cars in Germany. But for the upcoming electric ‘Baby-G’, the brand has changed its plans and is looking eastward.
According to Automobilwoche, the German Rastatt plant will not be awarded the contract. The smallest G ever will most likely be stamped by the Hungarian division and roll off the line at Kecskemét as of 2027.
The logic is blunt. Mercedes has pumped around one billion euros into the Kecskemét plant, nearly doubling capacity to between 300,000 and 400,000 vehicles a year. The Hungarian workforce there will roughly double to about 7,500.
From 15 to nearly 30 percent
Meanwhile, the German trio of Sindelfingen, Rastatt, and Bremen is left to divide 900,000 units between them (nosediving by roughly 100,000 units annually).
The Kecskemét site is set to become Mercedes’ largest plant in Europe, lifting its share of the brand’s European production from roughly 15 percent to almost 30 percent.
The Baby G will be built on the MMA platform shared with the new electric CLA, joining a growing factory portfolio that already includes the electric C-Class, the electric GLB, and the A-Class with combustion engines whose production shifted from Rastatt to extend its life until 2028.
Mercedes originally intended the Baby G, which is part of a plan to launch 40 new models by 2030, not only to be built in Germany but also to be exclusively electric.
Then the US federal EV tax credit vanished and demand cooled, pushing Ola Källenius to rethink the strategy. Now, the “Little G,” as the CEO calls it, will also arrive with a hybrid powertrain.
This will, with great certainty, be a 1.5-liter combustion engine with electric assistance, as found in the current CLA. The electric version is expected to feature an 85 kWh NMC battery and dual motors, with a claimed range of up to 724 kilometers.
More potential pain
The planned move from Germany to Hungary is part of Källenius’ cost-cutting program, which aims to reduce production costs by 10 percent between 2024 and 2027. These include possibly longer working hours for the same wage. The union response has been predictable. IG Metall has promised protests against these plans.
For the German unions, there is more potential pain. As part of the American tariffs, Mercedes is also planning to move GLC production from Bremen to Tuscaloosa, with a part of that European GLC volume possibly shifting to Kecskemét. That would mean Mercedes’ global best-seller would also come from Hungarian manufacturing lines.
The Little G will be pitched as an affordable entry into the G-Class legend. But whereas the latter has always been assembled manually at the Austrian factory in Graz, the spin-off for the masses seeks a home base built on economics and parts-sharing.
