Mercedes board member Markus Schäfer said Friday the Stuttgart-based carmaker would spend 1 billion euros ($1.1 billion) on a large new factory in Hungary, creating around 2,500 jobs.

He said it would be a "convertible plant," meaning it could be rapidly reconfigured to produce different models.

The new plant, Schäfer added, would be capable of producing rear-wheel drive cars as well as front-wheel drive vehicles amid an effort by Mercedes to eventually electrify all its passenger cars.

No time to waste

The new plant will sit alongside an existing Mercedes factory in Keckskemet some 70 kilometers (45 miles) south of Budapest.

Construction looks set to begin in 2018, with the carmaker hoping to start production in 2020 or a year later.

Executives announced plans to invest an additional 580 million euros in the modernization of the existing plant in Keckskemet where compact cars have been produced since 2012. The site currently has a workforce of 4,000.

hg/sri (Reuters, AFP)