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Mercedes Still in Love with Hungary

Mercedes recently confirmed that it will continue its expansion in Hungary, denying rumors saying that the German company may retract the investment due to the global economic crisis, The Budapest Times reported today.

Plans for the new Mercedes factory to be built in Kecskemet, Hungary, were announced in June this year, although Romania and Poland were also two possible destinations for the German investors. The 800 million euro plant is regarded as the biggest investment ever made in Hungary by a foreign company, so a potential withdrawal would be a huge loss for the Eastern European country.

The new Hungarian plant will employ approximately 2,500 workers which could boost the country's GDP (gross domestic product) by about 1 percent. Moreover, the German company wants to built around 300,000 cars per year, including the new generation A and B series, the aforementioned source added.

According to various sources, Hungary made the best European Union-allowed proposal to the German company, detrimental to Romania and Poland, two countries also interested in Mercedes' investment. Moreover, the Hungarian government confirmed that a new highway will be built in the next few years in order to provide direct access to the new Mercedes factory.

Rumors saying that Mercedes could abandon its plans to expand into Hungary spread on the web since last week, just after several other car manufacturers announced job cuts and lowered production. For instance, three motorcycle companies, Honda, Yamaha and Suzuki, said that the total number of units planned for 2009 will be reduced due to the low demand, which, in its turn, was caused by the global economic crisis.

Moreover, Jaguar Land Rover already announced that no less than 198 employees will be fired by the end of November, although the company's representatives repeatedly denied that it was a consequence of the aforementioned crisis.
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About the author: Bogdan Popa
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Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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