BUDAPEST -- BMW has assured Hungary that a new factory in the country will go ahead as planned even though rival Daimler has postponed plans to expand its Hungarian compact-car plant.
BMW has told Hungarian government that the decline in demand does not affect the automaker's planned factory in in Debrecen, Gergely Gulyas, the prime minister's chief of staff, told a media briefing on Wednesday.
BMW said last year that it plans to open a new factory in Hungary by 2023 to produce 150,000 vehicles a year, with construction starting later this year.
Handelsblatt said there were internal tensions over whether the factory should go head, with production leaders pressing for work to start while finance chiefs are worried about potential overcapacity in a downturn.
BMW and Daimler are reviewing their production plans in Hungary due to a projected fall in vehicle demand, German newspaper Handelsblatt reported on May 12.
Daimler has postponed plans to expand its compact-car plant in Kecskemet because of plans to optimize its production network, a company spokesman told Automobilwoche, a sister publication of Automotive News Europe.
Reuters contributed to this report
