Mercedes Baby G-Class to Be Built in Hungary, Not Germany, to Cut Costs

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The new baby G-Class will be built at Mercedes’ expanded Hungary plant.

Mercedes is investing to nearly double production capacity in Hungary.

The smaller rugged SUV will arrive with hybrid and all-electric powertrains.

The baby Mercedes-Benz G-Class is nearly here, though it won’t be quite as German as the badge suggests. A new report points to production at the company’s plant in Hungary, a site set to become the biggest Mercedes facility in Europe.

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Sources inside the automaker say the baby G enters production next year. The original plan called for an EV-only model, but with electric demand cooling across the US after the axing of the federal tax credit, Mercedes reversed course and approved hybrid combustion versions of the shrunken off-roader. Anyone who wanted a small G-shaped SUV without the battery-only commitment finally has a way in.

Read: Mercedes Planned An EV-Only Baby G, Now It’s Having Second Thoughts

Germany’s Automobilwoche reports that Mercedes may unveil the new model on July 13th, timed to coincide with an announcement about the expansion of its Kecskemet, Hungary, factory. The added work at the site has reportedly close to doubled annual capacity to between 300,000 and 400,000 vehicles. The plant will also grow its workforce to roughly 7,500 people, up from 3,000, and take on production of models including the new electric C-Class, the GLB, and the combustion-powered A-Class.

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SH Proshots

The reason for building the baby G-Wagen in Hungary is simple: cost-cutting. Labor costs in Hungary are lower than in Germany, and for a smaller vehicle like the mini G, which typically has lower margins than larger, more premium models, a penny saved is a penny earned.

The Key Details

Current reports peg the all-electric version with an 85 kWh NMC battery and a pair of electric motors. There’s no word on how much power this model will have, but it should have a driving range of up to 450 miles (724 km). As for the hybrid version , it could use the same powertrain as the CLA sedan, pairing a 1.5-liter engine with electric assistance to deliver a combined 208 hp and 280 lb-ft (380 Nm) of torque, although those figures could be increased for this application.

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