Mercedes won't cut German production but extra capacity will be added abroad

Stuttgart. The Sindelfingen plant will remain the centerpiece of Mercedes-Benz's worldwide production. "There will be no cuts in Sindelfingen, nor in Bremen or Untertuerkheim," Juergen Hubbert, head of the Mercedes Car Group, said in an interview with Automobilwoche.

However, Hubbert added that any large capacity increases will be added to Mercedes plants abroad and not to Sindelfingen.

Earlier, Erich Klemm, chairman of the group's works council, had said the carmaker had lowered its sales forecast for 2003 and would reduce production at the Sindelfingen plant. The factory is Mercedes' largest with a capacity of 500,000 units a year.

At a gala event in celebration of the 10th anniversary of Mercedes' Tuscaloosa, Alabama, plant Hubbert explicitly denied the rumors. He said that despite the difficult general economic situation there has been a slight production increase at Sindelfingen in 2003. In the first eight months of the current business year 330,000 vehicles were made, 3 percent more than in 2002.

"We continue to fully use the capacities available at all locations," Hubbert said.

There remains, however, a question mark over whether or not the

Sindelfingen factory will produce the new Mercedes CLS.

Contrary to the original plan, Hubbert is currently not so sure that the contract for the four-door coupe with an annual production of up to 60,000 units will go to Sindelfingen.

"A decision has not yet been made," he said.

Due to the "incredibly positive" response to the CLS prototype at the IAA in Frankfurt the company must start series production fairly soon, Hubbert said. "If, what we heard can be taken seriously, two years of production would already be sold."

The capacity for the planned "model family" around the new A-class at the Rastatt plant will be increased to 400,000 from 250,000 units.

The US plant will also profit from Hubbert's second model offensive, which aims to take the brand's total sales to 1.5 million units and increase its worldwide market share to 2.7 percent by 2010.

Around $600 million is being invested to expand capacity at Tuscaloosa to 160,000 units from 80,000. From the autumn of 2005 the new M-class and the Grand Sports Tourer (GST) will be made there. There will also be a new plant in China with an initial capacity of 25,000 units.

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