FRANKFURT - DaimlerChry-sler AG will build a small urban delivery van based on the Mercedes-Benz A class at its truck plant in Ludwigsfelde, Germany.
The new model will be the smallest in the Mercedes-Benz commercial vehicle range in Europe.
It will use an A-class platform with the wheelbase extended by 4 inches to about 100.8 inches.
Sales of the van will begin in the 2001 calendar year.
DaimlerChrysler expects to build between 40,000 and 50,000 units a year.
The company said it expects the total market for delivery vans in Western Europe to grow from 410,000 last year to 540,000 by 2001.
The European Commission approved a 218 million German marks (or about $132.3 million at current exchange rates) grant from the German state of Brandenburg for the project. The total investment will be about $380.1 million.
The company had threatened to build the vans in Poland had the state aid not been approved.
Daimler-Benz produces about 9,500 units of the larger Vario commercial vehicle in Ludwigsfelde.
The A class is built in Rastatt, Germany. Platform parts would be supplied from there to Lud-wigsfelde.