New compact G-Class: production in Hungary and hybrid versions
The compact Mercedes-Benz G-Class is almost ready for production, although its “German-ness” will be less obvious than it might seem at first glance. According to new data, the model will be assembled at the company’s plant in Hungary, which will become Mercedes’ largest production site in Europe.
Insiders report that production of the “baby G” will start next year. Initially, only an electric version was planned, but due to declining demand for electric vehicles in the US after the cancellation of the federal tax credit, the company changed its strategy. Now, the release of hybrid versions with an internal combustion engine for this downsized off-roader will be approved. Thus, those who wanted a compact G-like SUV without being tied to a battery will finally have that opportunity.
German publication Automobilwoche reports that Mercedes may unveil the new model on July 13, coinciding with the announcement of the expansion of the plant in Kecskemét, Hungary. The expansion of production capacity nearly doubled the annual output to 300,000–400,000 vehicles. The number of employees at the plant will increase from 3,000 to approximately 7,500 people. The new electric C-Class, GLB, and A-Class with an internal combustion engine will also be produced here.
Why Hungary?
The reason for producing the compact G-Wagen in Hungary is simple — cost savings. 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 and premium models, every penny saved counts.
Key technical specifications
According to current data, the fully electric version will receive an NMC battery with a capacity of 85 kWh and a pair of electric motors. The power of this model has not yet been disclosed, but the range could reach up to 450 miles (724 km). As for the hybrid version, it will likely use the same powertrain as the CLA sedan: a 1.5-liter engine combined with electric assistance, providing a total output of 208 hp and 280 lb-ft (380 Nm) of torque, although these figures may be increased for this vehicle.
The decision to move production to Hungary and add hybrid versions reflects Mercedes’ desire to make the model more affordable and adapted to current market conditions. This will allow the company to compete in the compact premium SUV segment, offering both electric and traditional options, thereby expanding the potential audience. At the same time, increasing production capacity in Hungary underscores a strategic shift toward cost optimization, which is critical for maintaining competitiveness amid global economic uncertainty.