Mercedes-Benz declared on Thursday that it will begin assembling a new high-volume vehicle at its Vance, Alabama plant starting in 2027. While the company has not officially disclosed the model, industry experts anticipate it to be the compact GLC crossover.
The company’s expansion in Alabama is part of its broader strategy to strengthen U.S. production and counter rising trade tariffs. On April 30, the automaker cautioned investors that unchanged U.S. tariff policies could threaten earnings, profit margins, and cash flow. CEO Ola Källenius emphasized that the company is gearing up for a future where vehicle manufacturing is increasingly region-focused.
Mercedes had previously evaluated the possibility of manufacturing a battery-powered GLC in the U.S. but later postponed its global electrification goals. Despite this shift, compact crossovers continue to be a key segment in the North American market. In 2023, Mercedes sold 64,163 GLCs in the U.S., representing nearly 20% of the brand’s non-commercial vehicle sales.
In 2023, demand for premium compact crossovers in the U.S. increased by 14%, reaching 425,294 units. Over the same period, GLC sales surged by 58%, securing the third spot in the segment. According to AutoForecast Solutions, once production is fully scaled, Mercedes may manufacture over 50,000 GLCs annually in Alabama.
Mercedes’ 6-million-square-foot factory in Vance currently produces GLS and GLE models, along with electric variants. The facility is running at 87% of its 305,000-unit annual capacity. Integrating GLC production will necessitate a substantial tooling investment, projected to cost several hundred million dollars.
Ola Källenius informed investors that the company is employing various strategies to mitigate the effects of tariffs, one of which is increasing vehicle assembly in the U.S.
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