Budapest  - The German car maker Daimler on Friday laid the cornerstone of a new production facility in the town of Kecskemet, central Hungary, that will employ some 2,500 people.

Prime Minister Gordon Bajnai said at the ceremony that the investment, which was announced in June 2008, speaks volumes about confidence in Hungary.

Daimler is planning to invest some 800 milllion euros (1.19 billion dollars) in the facility.

The project is the largest single foreign investment to date in Hungary and Daimler's first in Central and Eastern Europe.

The new plant is expected to produce some 100,000 Mercedes A- and B-class compact cars annually beginning in 2012.(dpa)