Daimler starts test production in Hungary image

German vehicle manufacturer Daimler on Monday said it has started test production in Hungary. Daimler plans to start regular operation by late March, a local newspaper reported.

The 800 million euros (1.2 billion dollars) plant in Kecskemet, 80 kilometers (50 miles) southeast of Budapest will have annual capacity of 100,000 units but the paper said that figure could be tripled just by increasing the number of shifts in the company’s existing factory.

The company plans to eventually employ 2,500 workers at the plant, where it will make next-generation models of Daimler’s A- and B-class compact cars.

Hungary, where Audi, another German automaker, has a long-established plant, has better highway and rail links to Western Europe than many of its ex-Communist peers.

The German maker posted a net profit of 6 bllion euros, or roughly $8.2 billion, on record sales of 106.5 billion Euros, or $145 billon, last year.

After the 9% increase in sales in 2011, however, Daimler is only predicting modest growth, this year. Nevertheless, in regional terms, Mercedes-Benz Cars sees further growth opportunities in 2012 in North America, as well as in China, India and Russia. “Prospects in Western Europe are rather limited, however,” the company said.