BUDAPEST -- Daimler AG denied a newspaper report saying that it plans to double the capacity of its new car plant in Hungary.
Citing unnamed market sources, business daily Napi Gazdasag said Daimler -- which is building an 800 million euro ($1.2 billion) car plant at Kecskemet in eastern Hungary -- would wait for the test run of this plant and could make a decision about possible further expansion afterwards.
"I cannot confirm this," a Daimler spokeswoman said in an e-mailed statement, adding that the plant's topping out ceremony had only taken place in October. "There are currently no plans for an expansion of the plant," she added.
The factory is scheduled to build 100,000 units a year of the next-generation A- and B-class entry-premium cars.
Other carmakers investing in Hungary include Audi and General Motors' Opel unit.
Audi plans a 900 million euros expansion of its Hungarian plant in Gyor, which would lift production to 125,000 vehicles a year once its expanded plant begins full production from 2013.
Audi, one of Hungary's largest exporters, is converting its Gyor factory, into a full assembly plant. Currently, Gyor assembles the TT coupe and roadster and A3 Cabriolet using locally built engines with other parts shipped in from Audi's home plant in Ingolstadt in Bavaria, Germany
Starting in 2013, Gyor will do the entire manufacturing process on its own, from chassis production to assembly. Gyor will also build a sedan version of the A3 model.
GM announced plans to boost production in at its Szentgottard plant, which builds gasoline engines and transmissions. The plant will build a new family of Euro 6-compliant, fuel-efficient engines, starting in 2012 and reaching 500,000 annual capacity by 2015.
Analysts say Hungary is an appealing investment destination because of a weakening forint and low wage inflation. It also has skilled labor and good highway infrastructure.
Sources: Reuters and Bloomberg