by Mercedes Continues A-Class Production, But Moves It Out of Germany
Mercedes-Benz does not intend to discontinue the A-Class model. Despite the fact that development of the next generation is already underway, the company’s management has decided to continue production of the current version of the car for at least until 2028. This indicates a change in the brand’s initial plans for its most compact model range.
The most significant change is that soon the A-Class will no longer be assembled at a German plant. Production will be relocated from the plant in Rastatt (Germany) to facilities in the Hungarian city of Kecskemét, located approximately 100 kilometers from Budapest.
Economic Reasons for Relocating Production
Moving production from Western to Eastern Europe is, first and foremost, a financial step. Lower labor costs and operating expenses in Hungary make this location a more economically efficient base for the A-Class. This is especially important for Mercedes, as the company aims to protect the profitability of its most affordable offering.
Production at the Hungarian plant is scheduled to begin in the second quarter of this year. The expected annual production volume is between 300,000 and 400,000 vehicles.
Overall Cost-Saving Strategy and the Model’s Future
This move is part of a large-scale cost-cutting program being implemented by Mercedes to compete with the accelerating Chinese brands. The goal is to save around 5 billion euros by the end of 2027.
The current generation of the A-Class, introduced in 2018, will now remain on the assembly line until 2028. The next generation is already under development and is expected to be built on the MMA architecture, the same one underpinning the new CLA. This will allow the company to offer both internal combustion engine cars and electric vehicles, maintaining flexibility for different markets.
This decision came after a period of uncertainty. In early 2025, Mercedes announced it would discontinue A-Class production after the current generation as part of a plan to optimize its compact car lineup.
However, just a few months later, reports emerged that the brand might reverse its decision. It remains unclear whether the A-Class will continue to exist specifically as a hatchback body style, or if a compact SUV will become the new entry-level car.
The Growing Role of the Hungarian Plant
Relocating A-Class production also has a strategic goal. It allows for freeing up capacity at the Rastatt plant for the production of new models on the MMA platform, including the new CLA. The expansion in Hungary will be accompanied by significant hiring: approximately 3,000 new employees are expected to join the existing workforce of 4,500 people, reinforcing the company’s investment in the region.
These changes clearly demonstrate how global automakers are adapting their business model to new economic realities. Moving production of affordable models to regions with lower costs is becoming an increasingly common practice to maintain competitiveness. For Mercedes, this is also an opportunity to optimize the use of its European plants, specializing them for specific platforms and models, which in the long term could increase the efficiency of the entire production chain.
