Ineos Automotive has completed a deal with Mercedes-Benz to buy the Smart factory in Hambach, France, to use as the production home for its new Grenadier off-roader.

The British firm began talks with Mercedes to purchase the facility shortly after the German firm put it up for sale last July as part of a streamlining of its production network.

Ineos has now taken ownership of the site, with production of the Grenadier 4×4 due to begin there in late 2021. Financial terms of the deal haven’t been disclosed.

Ineos has also agreed a contract manufacturing deal to continue production of the current generation electric two-seat Smart EQ and certain other components for Mercedes. In total, Ineos will continue to employ around 1300 staff at the site.

Ineos Automotive boss Dirk Heilmann said the “acquisition marks our biggest milestone year in the development of the Grenadier”. Prototype versions of the car have begun testing ahead of its launch next year.

Prior to the deal with Mercedes, Ineos had planned to build chassis for the Grenadier in Portugal, with final assembly taking place at a new £600 million plant in Bridgend, Wales.

Ineos chairman Jim Ratcliffe said the chance to buy Hambach was a “unique opportunity that we simply could not ignore: to buy a modern automotive manufacturing facility with a world-class workforce.”

Jörg Burzer, Mercedes’ board member for production, said that the sale of the plant would help the firm to hit its sustainability targets. He added: “In selling the Hambach plant, our goals were to continue production of the current electric Smart models and to secure employment at the facility. We achieved both goals.”

It’s unclear how long the contract for Ineos to product the electric Smart EQ runs for. Last year, Mercedes sold 50% of Smart to Chinese company Geely, and production of its future electric models is due to take place in China.  

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