LONDON—Materials giant Ineos has agreed to buy Daimler A.G.'s auto assembly plant in factory in Hambach, France, where it will build a utility vehicle marking Ineos' move into becoming an auto maker.
Ineos plans to begin making its Grenadier 4x4 by the end of 2021 at the plant, which originally was developed to make the plastic bodied Smart car.
Terms were not disclosed, but Frankfurt-based Daimler will contract with Ineos to produce the Smart ForTwo electric minicar at Hambach until 2024 as well as components for Mercedes-Benz models, the auto maker said in a Dec. 8 news release.The deal had been in the works since this summer.
"Manufacturing at Hambach ensures that Ineos remains on track to meet its plans to deliver the Grenadier to customers in early 2022," Ineos said in a statement.
The agreement will preserve just over 1,300 jobs at the site, where about 800 people work in production and another 800 for suppliers and in other support positions.
Ineos is aiming for annual production of about 25,000 Grenadiers, a large SUV similar to the body-on-frame Land Rover Defender 110 that was discontinued in 2016. Ineos teams plan to start work at the site as early as January, Smart and union representatives told the French website Usine Nouvelle on Tuesday.
Unions at the factory approved the sale several weeks ago, despite concerns about the sustainability of building a large internal-combustion engine vehicle at a time when European emissions standards continue to tighten.
Ineos may turn to hydrogen power in the future, however, as it recently signed an agreement with Hyundai to "explore the use" of Hyundai's fuel cell technology in Grenadier vehicles.
The Hambach factory, known as Smartville in France, opened in 1997 in a ceremony attended by President Jacques Chirac of France and Chancellor Helmut Kohl of Germany. Production reached a high of about 140,000 in 2008; in 2019 about 70,000 vehicles were built there, according to research company Inovev.
The complex also included integrated injection molding and assembly lines that delivered doors and other plastic panels direct to Daimler's production lines.