Hungary welcomes Mercedes EV investment

BUDAPEST -- Daimler will invest more than 100 million euros ($122 million) in its Mercedes-Benz plant in Hungary, to build the EQB battery-powered SUV, factory director Christian Wolff said on Monday.

The compact SUV will be the first full-electric car produced in Hungary, whose economy is dependent on car manufacturing, with Daimler, BMW and Audi all building or expanding manufacturing capacity in the country.

Production of the EQB will start in Hungary, and Beijing next year.

Foreign Minister Peter Szijjarto said on his Facebook page that the government had contributed 15 billion forints ($52 million) to the investment to secure the 4,400 jobs Daimler has filled in the central Hungarian town of Kecskemet.

Hungary's economy imploded in the wake of the coronavirus pandemic, falling by an annual 13.6 percent in the second quarter. The government expects a 5 percent to 6 percent fall in 2020 before a modest rebound in 2021.

BMW said earlier this year that its new factory, under construction near the eastern Hungarian city of Debrecen, will be delayed by a few months due to the pandemic. BMW also plans to produce full-electric vehicles in Hungary.

In the summer, analysts expected the auto industry, long a driver of economic growth in central Europe, to be one of the main drags as the region recovers from COVID-19.

Several major battery makers established production units in Hungary, as in other countries in Europe, as the world prepares for the era of electric vehicles.