Mercedes, With New Plant, Takes Small Car Aim At BMW

Why Detroit Can’t Stop Chasing Europe

Micheline Maynard

Mercedes B-Class  (Photo credit: Wikipedia

The duel between Mercedes-Benz and BMW is the kind of battle that makes peoples' light up. And now, Mercedes is adding fuel to the fire by ramping up production of luxury compact cars.

A key step came Thursday in an unlikely spot: Kecskemet, Hungary, about 60 miles from Budapest. That's where Mercedes inaugurated a new factory, the first that the automaker has opened in 15 years, since it began building vehicles in Vance, Ala.

The plant cost $1 billion, and will build the B-class compact, now in its second generation, and one of the linchpins of Mercedes' small car lineup.

The B-class is not sold yet in the United States, but it is sold in Canada, where it starts at about $30,000,  and many experts think it eventually will be part of Mercedes' American lineup.

Since going on sale in late 2011, Mercedes said it has received 100,000 orders for the new B-class, which it also builds in Rastatt, Germany.

At the plant opening, Mercedes also announced it will produce a four-door coupe at the Kecskemet factory, that will go on  sale in 2013. A concept version is expected to be shown next month at the Beijing Auto Show.

"With the start of production in Kecskemet, the Mercedes-Benz offensive in the premium compact segment is shifting up a gear," said Dieter Zetsche, chief executive at Mercedes' parent Daimler.  With the new factory, "we now have the capacity to meet the demand from many existing – and new – customers in the premium compact segment."

Mercedes, which expects record first quarter sales, is on a drive to increase its sales by 25 percent over the next few years. On Thursday, the automaker reaffirmed its plans to sell more than 1. 5 million vehicles in 2014 and 1.6 million in 2015.

BMW beat Mercedes last year for American luxury car leadership, but the two brands outsold Lexus in 2011 as well as their American competitors. BMW's weapons in the small car battle have been its 3-series, as well as the 1-series and its Mini lineup.

 

 

 

 

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