Workers vs. Strategy: Mercedes-Benz Pours €1 Billion Into Hungary as 20,000 Rally in Sindelfingen
Published on 07/07/2026 at 03:25 | Redaktion boerse-global.de
Mercedes-Benz is navigating an increasingly fractious landscape. The carmaker is investing roughly €1 billion to turbocharge its plant in Kecskemét, Hungary, essentially doubling annual capacity to between 300,000 and 400,000 vehicles, while thousands of German employees are staging loud protests against the board’s austerity drive.
The Hungarian site, which currently accounts for about 15 percent of the company’s European output, will see that share rise to around 30 percent. A key reason is the allocation of the compact “small G-Class” electric model, slated for start of production in 2027 on the MMA platform. Kecskemét will also handle the electric C-Class alongside the combustion-engine A-Class and GLB. Alongside the investment, the local workforce is set to swell by 3,000 to 7,500.
Mercedes has justified the shift with lower labour and energy costs. But for labour representatives in Germany, the expansion abroad is a bitter pill while plants at home face deeper cuts.
Should investors sell immediately? Or is it worth buying Mercedes-Benz?
The mood in the domestic workforce turned ugly this week, with roughly 20,000 employees gathering at the Sindelfingen site alone. The protests, orchestrated by IG Metall, are aimed squarely at CEO Ola Källenius. The company intends to abolish a collectively bargained special payment for about 90,000 workers, pushing any such payout to at least next year, and is also planning to introduce unpaid extra work, bringing the weekly hours to 40. The union is already preparing nationwide rallies.
The unrest comes at a delicate time for the stock. Mercedes shares closed Monday at €45.34, only a whisker above their 52-week low of €42.64 hit in late June. On the plus side, the equity has managed a 4.1 percent advance over the past week, but the year-to-date damage stands at 26.46 percent. The long-term moving average at €54.75 remains a distant overhead resistance, confirming the persistent downtrend. The relative strength index of 43.6 sits in neutral territory, offering little directional clarity.
Some on Wall Street, however, see opportunity in the rubble. Jefferies has upgraded the stock from “Hold” to “Buy”, with analyst Philippe Houchois praising the internal restructuring. The firm slashed its price target from €60 to €52, arguing that operational risks and the China slowdown are already baked into the current valuation. The broader analyst consensus remains a “Buy”, with an average 12-month target of €59.69. UBS, by contrast, stays on the sidelines with a neutral rating.
The next couple of weeks are pivotal. Mid-July sees an analyst discussion focused on margin development, followed by the detailed second-quarter report at the end of the month. If the numbers fail to show margin stabilisation, the pressure on Källenius will intensify — even the roughly 6.5 percent dividend yield may not be enough to stem further selling. The question is whether the board can calm the shop floor before investors lose patience altogether.
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