Daimler to invest $1.3 billion to expand Mercedes SUV plant in Alabama

The Alabama project will create a high-tech location to manufacture vehicles "even more flexibly, efficiently and in proven top quality," said Markus Schaefer, head of manufacturing at Daimler's Mercedes-Benz Cars division. Photo credit: BLOOMBERG
UPDATED: 9/18/15 1:48 pm ET - adds details

Daimler AG will invest $1.3 billion at its U.S. plant to boost production of Mercedes-Benz sport utility vehicles, creating an additional 300 jobs.

The expansion of the factory in Tuscaloosa, Ala., which has built Mercedes cars since 1997, is geared toward developing the company's next generation of SUVs, Daimler said Friday in a statement.

The project will create a high-tech location to manufacture vehicles "even more flexibly, efficiently and in proven top quality," Markus Schaefer, head of manufacturing at Daimler's Mercedes-Benz Cars division, said in the statement.

The company didn't specify a time frame for the investment.

Daimler outlined plans in April to spend 25 billion euros ($28.5 billion) worldwide through 2016 to develop new models and build factories. Daimler CEO Dieter Zetsche is pushing for the Mercedes brand to take the top spot in global luxury-car sales from BMW AG's namesake marque by the end of the decade.

Mercedes builds the GLE and GL SUVs, and the C-class sedan, at the plant. Mercedes moved production of the R-class wagon this year to a plant in Indiana owned by AM General to free up capacity at the Alabama site for more SUVs.

Demand for the off- road models will probably surge 61 percent by the end of the decade to 19.8 million vehicles as family buyers seek more carrying space as well as a sporty image, according to forecaster IHS Automotive.

The Tuscaloosa plant produced more than 232,000 vehicles in 2014 and is on track to exceed 300,000 cars and SUVs in 2015, Daimler said.

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