Daimler to Double Investment in Small-Car Plant

Daimler AG has invested €600 million to retool its factory in Rastatt, Germany, for the next-generation Mercedes-Benz A-Class car. The company says it will spend another €600 million there by the end of 2013, when the plant is due to begin making a new SUV version of the tiny A-Class.

Daimler started production of the revamped A-Class car in Rastatt on Monday. The facility began building the latest generation of the B-Class small hatchback van last September.

The company plans to hire 500 workers in Rastatt this year and add a third shift in October. Daimler says it has received more than 40,000 orders for the redesigned A-Class cars.

CEO Dieter Zetsche tells reporters that the A- and B-Class models will be the company's "sharpest weapons" in its quest to become the top-selling luxury car brand by 2020. Daimler currently ranks third behind BMW and Audi.

Zetsche says global demand for Mercedes-Benz passenger vehicles remains strong this year despite slumping auto markets in southern Europe.