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Daimler Building Factory In Hungary

German carmaker's Mercedes-Benz car unit to build a new car plant in Hungary to boost competitiveness and access new markets.

FRANKFURT, Germany (AP) -- German carmaker Daimler AG said Wednesday its Mercedes-Benz car unit would build a new car plant in Kecskemet, Hungary, and make further investments in its Rastatt plant in Germany. The company also said it wants to add two compact car models to its lineup.

The Stuttgart-based company said in a statement it would invest euro800 million (US$1.24 billion) to build the Kecskemet plant near Budapest, and would sign a memorandum of understanding with government officials there in the coming weeks. The new factory will ''boost competitiveness, and access new markets,'' as well as create up to 2,500 new jobs, Daimler said.

The company said it would also invest euro600 million (US$930 million) in its Rastatt car plant in southwest Germany to improve production there for the long-term.

Daimler also wants to add two models to its compact car lineup, bringing the number of compact vehicles to four.

''Mercedes-Benz is going to offer an even wider range of exciting premium cars with the high levels of comfort, safety and overall quality that are characteristic of the brand -- in the particularly fuel-efficient compact-car segment,'' said Dieter Zetsche, the company's chief executive.

''Moreover, our expanded product range will allow us to tap into new customer groups and open up new market regions,'' Zetsche said.

The statement said the successor compact generation will include product characteristics that are already popular, like generous interior space and elevated seating positions, but did not offer more details on the new cars.

Shares of Daimler were trading down 0.64 percent at euro44.85 (US$69.52) in Frankfurt morning trading.

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