Daimler's Zetsche says building new U.S. factory is 'an option'

Zetsche: "There is a shortage [of Mercedes cars] in every market." Photo credit: Bloomberg

DETROIT (Reuters) -- Daimler CEO Dieter Zetsche said the automaker may build another factory in North America as a way to ramp up global production capacity for its Mercedes-Benz cars.

"We are starting work on our next generation of compact cars, and as part of that discussion there is a discussion about additional plant capacity," Zetsche said on the sidelines of a Mercedes evening event at the Detroit auto show.

"An additional plant in North America is one scenario," Zetsche said. No decisions about such a move had been taken, he added.

On December 23, The Wall Street Journal reported that Daimler would make a decision on a second U.S. factory this year and cited Mercedes' production chief, Andreas Renschler, as saying the company would consider whether it needs new production capacity to boost output of its next-generation compact range.

Zetsche said the capacity constraints were a "luxury problem" as they were a symptom of strong car sales. "There is a shortage in every market," he said, adding that demand for vehicles such as the new S class was brisk.

Mercedes produces about two thirds of its cars in Germany but 80 percent of its sales come from outside the country. Further expanding production capacity for compact cars at its factory in Alabama, where the automaker currently builds SUVs and will shortly start building the new C class, was not a likely scenario, Zetsche added.

Mercedes beat rival BMW last year to capture the U.S. luxury-brand sales crown -- the first time the brand has finished on top since 1999. Mercedes sold 312,528 brand vehicles, a rise of 14 percent, while BMW-brand sales rose 10 percent to 309,280.

Automotive News Europe contributed to this report



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