Nearly three years have passed since Mercedes-Benz confirmed it was developing a smaller, more affordable version of the iconic G-Class. After teasing the project at the 2023 IAA Mobility Show in Munich, the upcoming SUV quickly earned unofficial names such as the Little G, Baby G, and Junior G.
Mercedes has referred to the model internally as the lowercase “G-Class” to distinguish it from the full-size G-Class, although the company has yet to announce an official launch date.
Industry reports suggest the compact off-roader is expected to arrive in 2027, with production likely taking place in Kecskemét, Hungary.
According to sources familiar with Mercedes’ plans, the SUV will be assembled at the company’s Hungarian manufacturing facility. Until now, many had assumed production would occur at the Rastatt plant in Germany alongside the latest CLA.
That expectation was reasonable because the smaller G-Class is widely believed to share its underlying architecture with the new CLA and its shooting-brake counterpart. However, moving production to Hungary appears to be part of Mercedes’ broader cost-saving strategy.
Manufacturing expenses at the Kecskemét factory are considerably lower than those at Rastatt, making Hungary a more economical location for building the new model.
Before those savings can be realized, Mercedes is making a substantial investment in the facility. The automaker is spending €1 billion to expand the Kecskemét plant, increasing its annual production capacity to approximately 400,000 vehicles.
Once completed, it is expected to become Mercedes’ largest production site in Europe. Reports indicate the factory could eventually account for around 30 percent of the company’s total European output, roughly double its current contribution.
To support the expansion, Mercedes plans to recruit about 3,000 additional workers, bringing the site’s workforce to roughly 7,500 employees.
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Producing the compact G-Class in Hungary instead of Germany could potentially reduce its retail price, provided Mercedes chooses to pass some of those manufacturing savings on to buyers.
While the smaller SUV is unlikely to match the legendary off-road capability of the full-size G-Class, it is expected to offer significantly stronger off-road performance than the similarly sized GLB.
Although many assume the two vehicles will share numerous components, Mercedes-Benz CEO Ola Källenius has previously described the compact G as an entirely new vehicle rather than a derivative of an existing model.
Gasoline and Electric Variants Expected
Regardless of where it is built, the upcoming compact G-Class is now expected to be offered with both internal combustion and electric powertrains. Mercedes had originally intended to sell the model exclusively as an EV, but feedback from dealers in the United States reportedly encouraged the company to develop a gasoline-powered version as well.
Although the price gap between electric and combustion models continues to shrink, Germany’s mild-hybrid GLB remains roughly €4,000 less expensive than its fully electric counterpart.
Pricing for the new model has not yet been announced, but it is expected to sit comfortably between the GLB and the flagship G-Class. With the GLB starting at €46,868 and the larger G-Class carrying a base price of €127,591, the compact G-Class will likely occupy the middle ground.
If Mercedes’ claims that the SUV is a completely new design prove accurate, buyers should expect a higher price than the brand’s existing compact models while remaining well below the cost of the iconic G-Class.
