Daimler joins rush to add more North American auto plants

September 21, 2017 01:00 AM

Joseph White

Reuters

Daimler showed off an EQ concept SUV last year at the Paris auto show. It was described as a "near-production" vehicle.

Carmakers announce $9.5 billion in U.S. investments so far in 2017

Since January, automakers have announced investments totaling $9.5 billion in U.S. plants, creating or retaining more than 12,000 jobs. By company, the investments from the United States and abroad are:

* General Motors: $1 billion in various plants to keep or create 1,500 jobs

* Fiat Chrysler Automobiles: $1 billion in Ohio and Michigan to create 2,000 jobs

* Hyundai Motor Co.: $1 billion in various plants; new jobs to be determined

* Ford Motor Co.: $1.2 billion in Michigan, new jobs to be determined

* Toyota Motor Corp.: $1.3 billion in Kentucky; no new jobs

* BMW: $600 million in South Carolina to create 1,000 jobs

* Toyota and Mazda Motor Corp.: $1.6 billion to create 4,000 jobs; site to be determined

* Honda Motor Co.: $267 million in Ohio to create 300 jobs

* Volvo Car: $500 million in South Carolina to create 2,500 jobs

* Daimler AG: $1 billion in Alabama to create 1,300 jobs

Source: Reuters

DETROIT -- U.S. automakers are facing mounting pressure amid slowing demand in the country, as Asian and European automakers aggressively ramp up vehicle production in North America, including a new investment by Daimler AG.

In the latest move, German automaker Daimler plans to spend $1 billion to expand its Mercedes Benz assembly plant in Vance, Ala., in part to produce electric utility vehicles that would compete with several major automakers and Tesla.

Daimler is joining a rush to add vehicle-making capacity in a market that most analysts and industry executives expect to contract moderately over the next several years, following record sales of 17.55 million vehicles in 2016.

Indeed, Detroit's automakers are already temporarily idling factories and laying off thousands of workers as demand slows for their sedans and luxury cars.

Global automakers have come under pressure from U.S. President Donald Trump's bid to curb imports and hire more workers to build cars and trucks in the country.

The burst of investments to expand U.S. vehicle production capacity also reflects intensified competition for market share in the world's most profitable vehicle market.

Rival German luxury automaker BMW AG said in June it would expand its U.S. factory in South Carolina, adding 1,000 jobs.

Japan's Toyota Motor Corp. and Mazda Motor Corp. said in August they would join forces to build a new U.S. factory capable of producing up to 300,000 vehicles a year, with 4,000 new jobs.

Volvo Cars, the Swedish brand owned by China's Zhejiang Geely Holding Group, is planning a second production line at a factory in South Carolina that is still under construction, according to people familiar with the plans.

Silicon Valley automaker Tesla, meanwhile, is gearing up to produce as many as 500,000 Model 3 electric cars a year at its factory in Fremont, Calif., in an effort to increase its annual sales more than fivefold.

Tesla, like its German rivals, will export some of the new vehicles it plans. But if the company led by billionaire Elon Musk sold 500,000 Model 3's in the United States, it would become the largest luxury vehicle brand in the market, based on 2016 sales.