A suspect has been detained after a shooting at a Mercedes-Benz plant in southwestern Germany left two people dead, adding to pressure on Germany to tighten its already-strict gun laws.

The suspect was identified as a 53-year-old man.

Mercedes-Benz said two people had died.

The Stuttgart prosecutor confirmed a second person had died and said no one else was injured.

"One person is in police custody. The persons are employees of an external service provider," Mercedes said in a statement.

Investigators are working on the assumption of a single perpetrator in the shooting and that no individuals outside the factory were involved, a representative for the prosecutor's office said.

The incident was the latest of a number of mass shootings in Germany in recent years, many of which had a connection with extremism.

The German government had vowed to tighten its gun laws further after a gunman opened fire on people gathered in a Jehovah's Witnesses hall in Hamburg in March, killing six.

Germany outlawed certain large magazines in 2020 and conducts five-yearly checks on gun owners to ascertain whether their possession of a weapon is justified.

Mercedes-Benz produces its flagship S-Class luxury sedan at the location in Sindelfingen, located some 17 kilometres southwest of Stuttgart.

Some 35,000 people are employed at the site.

Mercedes said there was no longer any danger to locals or colleagues in Sindelfingen.

"We are deeply shocked and saddened by the tragic news from Sindelfingen this morning. Our thoughts are with the victims, their families and all colleagues on site," it said in a statement.