News Summary
Mercedes-Benz has announced plans to localize production of a core segment vehicle at its Tuscaloosa plant, set to begin in 2027. This strategic move is intended to strengthen the company’s presence in the U.S. market and enhance customer connectivity. With a longstanding history of exporting a majority of its U.S. output, Mercedes-Benz aims to adapt to local preferences while reinforcing job security and economic contributions in Alabama. Additionally, plans for further investments in electric vehicle infrastructure demonstrate the company’s commitment to innovation in the region.
Tuscaloosa, Alabama – Mercedes-Benz announced plans to localize production of a core segment vehicle at its Tuscaloosa plant, with production scheduled to begin in 2027. This significant move aims to bolster Alabama’s role within the company’s global production network and enhance its connection with the U.S. market.
The decision comes as Mercedes-Benz has historically exported around two-thirds of its annual output from the U.S., marking it as one of the leading automobile exporters from the country. The Tuscaloosa facility has already produced more than 4.5 million vehicles since its inception in 1997, with projections indicating that approximately 260,000 vehicles will roll off the assembly line in 2024 alone.
Currently, the Tuscaloosa plant is responsible for producing various models including the GLE, GLS, GLE Coupe, and the luxury versions such as the Mercedes-Maybach GLS and the EQS SUV series. The new core segment vehicle will adhere to the company’s local-for-local strategy, designed to better meet the preferences of American consumers. Localizing production is expected to strengthen customer relationships in the U.S. market.
Employment figures at the Tuscaloosa plant are robust, with over 6,000 individuals currently employed. Additionally, the plant supports an estimated 60,000 jobs within the regional supply chain, which includes approximately 200 local suppliers based in Alabama. The company has made significant investments in its U.S. operations, with over USD 10 billion allocated since its establishment in the country. More than USD 7 billion of that amount has been dedicated to the Tuscaloosa facility alone, which also plays a crucial role in the broader economic landscape of the region.
The announcement coincides with Alabama Governor Kay Ivey and Senator Katie Britt expressing support for Mercedes-Benz’s decision, emphasizing the state’s growing reputation as a global manufacturing hub. However, specifics regarding potential job creation and increased production capacity related to the new core segment vehicle have not yet been disclosed.
Mercedes-Benz’s operations in the U.S. also include the development of a high-speed charging network for electric vehicles, with plans for a USD 1.2 billion investment over the next 6-7 years. As of 2024, the U.S. remains the second-largest global market for Mercedes-Benz, evidenced by sales figures of 324,500 passenger cars and 49,600 vans.
Additionally, the company has actively engaged in innovation within the U.S. by filing nearly 100 technology patents and introducing advanced systems such as the DRIVE PILOT for automated driving. This commitment to innovation and local production reflects the strategic importance of the U.S. market to Mercedes-Benz, which has been part of the company’s identity for over a century.
This move towards localization comes in the context of a ongoing 25% tariff on automotive imports and parts, which is believed to have influenced the decision-making process for production localization. As the automotive industry continues to evolve, Mercedes-Benz aims to adapt to market demands by enhancing its operational capabilities within the U.S.
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