MUNICH: Mercedes-Benz Group AG has kicked off production of its fully-electric GLB compact sport utility vehicle or SUV in Hungary as the threat of further tariffs and competition from China intensifies the fight to cut costs.
The electric version of the model, available to order for around 59,000, will be assembled at the carmaker’s plant in Kecskemet.
Mercedes is concentrating output of the GLB in Hungary, shifting from Mexico, while it ceased production of the B-Class tourer at its Rastatt plant in Germany at the end of last year.
The company will also move some production of the mid-range C-Class sedan to Hungary later this year to tap a cost base executives have said is less than half that of Germany.
“The batteries we put in this car come right from the battery facility we have here on site,” Mercedes production chief Michael Schiebe said at a press conference, referring to its facility making battery packs.
“This reduces the transport times, the routes. This gives us big, big advantages.”
Mercedes is seeking to bolster its business as demand slows in China for high-end vehicles and more tariffs loom.
Over the weekend, US President Donald Trump reignited fears for fresh tariffs blows with a threat of additional levies on products from eight European countries, including Germany, as part of a standoff over Greenland.
Mercedes and German carmaker peers slumped Monday after Trump blindsided Europe with a plan to slap additional duties of 10% on imports from February, rising to 25% in June.
German manufacturers rely on the United States as a major source of sales and profits, and import models such as Mercedes’ S-Class to the country.
Mercedes was down 2.2% at 5:27pm in Frankfurt, following a drop of as much as 6.7% earlier Monday.
Additional US tariffs, in place since April, are already cutting into Mercedes’ bottom line with returns sliding also because of growing competition in China from local carmakers including BYD Co, Nio Inc and Xiaomi Corp. — Bloomberg
