Mercedes will relocate A-Class production to Kecskemét, Hungary, starting in the second quarter of 2026, meaning the Rastatt plant will lose a key volume model. The company cites the need for more space, but production is moving abroad, while jobs in Germany are at least indirectly coming under renewed pressure. (reuters: 06.01.26)
A-Class and Location Policy – Why the Move Is More Than Just a Plant Exchange
Mercedes justifies the move with the planned model launch in Rastatt, where new model series are to be launched more quickly. “By deciding to produce the A-Class at the Kecskemét plant starting in the second quarter of 2026, we are creating the necessary spatial conditions for the launch of the planned models at the Rastatt plant,” said a spokesperson. The statement seems clear, but it remains unclear which specific models will be produced and how stable their capacity utilization will actually be.
Kecskemét is attractive for the A-Class because the Hungarian plant produces more efficiently and its costs are generally lower. This gives Mercedes more flexibility in production, while Rastatt has to shoulder the burden of the conversion. This logic aligns with controlling principles, but it weakens the concept of the plant location, because a compact car is no longer produced where expertise and a supplier network have been cultivated over years.
Production is shifted, risks remain in Germany
A high-volume model stabilizes cycle times, shifts, and supplier orders, and it is precisely this stability that the Rastatt plant loses with the relocation. Production becomes more dependent on ramp-ups, even though experience shows that ramp-ups are prone to errors. Furthermore, a conversion ties up capital and attention, so operational friction quickly impacts production volumes and quality.
While Mercedes emphasizes the flexibility of the network, a strategic conflict of objectives arises. If production moves to Kecskemét, the complexity of transport and coordination increases, while Rastatt simultaneously sets up new lines. This doesn’t automatically reduce costs, because disruptions in logistics and material flow can reverse the overall picture.
Jobs in Focus: No Cuts Announced, but New Uncertainty
Mercedes hasn’t announced any direct job cuts, but the move is changing the dynamics at the plant. Without the A-Class, Rastatt will have to prove more quickly that new models are running on time and profitably, otherwise capacity gaps will arise. This increases the pressure on teams and service providers, even if the workforce officially remains.
Ultimately, for jobs, capacity utilization is what counts, and capacity utilization depends on demand and the model mix. If Mercedes positions future entry-level models differently, competition between locations could intensify, while the discussion about jobs quickly becomes politically charged. At the same time, the relocation sends a signal to suppliers, as they will have to adapt their processes to Kecskemét or risk losing contracts.
Conclusion: Kecskemét Wins, Rastatt Must Deliver
With Kecskemét, Mercedes achieves short-term planning certainty for the A-Class, and at the same time, the company frees up space in Rastatt. However, the price remains visible because added value and volume are flowing out of Germany, even though volume is precisely what supports the industrial base. The crucial question, therefore, is whether Mercedes will finalize the new projects in Rastatt and whether production there will remain stable in the long term, so that jobs are not lost indirectly.