Mercedes plans major hike in Alabama vehicle production

Production of the new Mercedes C class in Vance.

FRANKFURT (Reuters) -- Mercedes plans to "significantly" raise production capacity at its U.S. plant in Vance, Ala., from a current level of around 185,000 vehicles, as it adds new models including its Mercedes C-class sedan and a new SUV.

The automaker's push to expand vehicle production comes after car sales in the United States recovered to levels seen before the 2007 financial crisis and after rival BMW said it would raise U.S. production by 50 percent to 450,000 cars by 2016.

Mercedes parent Daimler AG on Wednesday said it had started production of the next-generation C class in the Vance plant.

A Daimler spokesman declined to give a figure or a timeline for the factory's planned production increase, but said it will be "significantly above our previous capacity of SUV production."

In 2013, the Vance plant built 185,000 vehicles.

Daimler is raising manufacturing capacity with the introduction of its C class as part of a global rollout of its best-selling model, which is already being produced in South Africa and Germany.

The U.S. plant currently makes SUVs including the M class and the GL class. In 2015, Vance will also start making a production version of the Concept SUV Coupe unveiled at the Beijing auto show earlier this year, Daimler said.

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