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Mercedes considers expanding production in North America

By: Diana T. Kurylko
AUTOMOTIVE NEWS

March 4, 2014

GENEVA — Daimler AG is looking to add production capacity in North America for both its compact and rear-wheel drive models, CEO Dieter Zetsche said March 4.

Plans are in the "very early" stages for the rear-wheel drive vehicles and "it is totally open," Zetsche said on the sidelines of the Geneva Motor Show here.

He would not say whether Mercedes is looking at expanding its factory in Vance, Ala., or building a new plant. Mercedes just began production of the redesigned rear wheel drive C-class sedan in Alabama, primarily for the U.S. market.

Alabama builds the all-wheel-drive M and GL-class crossovers and will add a M-class coupe crossover next year.

To cope with the shortage of front-wheel drive cars, Mercedes-Benz is adding shifts and outsourcing some production to Valmet Automotive Inc., which assembles cars for multiple automakers in Uusikaupunki, Finland. There are already shortages of the CLA sedan in the United States that aren't likely to be remedied until early summer.

Mercedes expects worldwide sales of its front-wheel drive models, which include the A-class not sold in the United States, to rise to 500,000 units this year from last year's 370,000.

The B-class electric car goes on sale in the United States in July and the GLA crossover debuts this summer.

Zetsche said there will be even more variants with the new generation of the front-wheel drive family.

"Independent of what we are planning mid-term, for the next generation front-wheel drive (cars) we need additional plant capacity with probably a new location," Zetsche said.

The front-wheel drive vehicles would be built in the North American free trade zone, he said. That includes Mexico where Mercedes-Benz has been considering joint production at a Nissan factory.

Zetsche would not give a timetable but said "we are evaluating different scenarios."