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The Financial Times is reporting today that Daimler is planning to build Mercedes cars at a new factory in either Poland or Romania.

The newspaper reports an investment adviser as saying that the decision had narrowed to two sites, one near the Polish city of Wroclaw and the other near Cluj in north-west Romania.

Daimler has denied the story, but has confirmed that if it was looking for extra capacity it would consider a site in eastern Europe. "But no decision has been taken," the company said.