In a big tariff victory for President Donald Trump, Mercedes-Benz has decided to expand its Alabama plant with a new “core segment” vehicle by 2027 sending a clear message about American manufacturing’s growing importance.
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Mercedes-Benz announced it will begin production of a new vehicle at its Tuscaloosa County plant in 2027.
While details about the model remain unspecified, it is touted as a “core segment vehicle.”
The factory currently specializes in SUVs and has served as a key manufacturing site for nearly 30 years, producing over 4.5 million vehicles since 1997.
The Tuscaloosa plant’s significance in the Mercedes-Benz production portfolio can’t be overstated.
Approximately 60% of its annual output is exported globally, showcasing the plant’s strategic importance.
The company has invested $7 billion into Alabama, with $1.2 billion earmarked since 2017 for electric vehicle and battery production, further underscoring its long-term commitment to the U.S. market.
“We are getting even closer to the U.S. customer by localizing a core segment model in Tuscaloosa, strengthening our ties to the North American market where a range of Mercedes-Benz vehicles including the GLE and GLS models have their roots,” said Jason Hoff, CEO Mercedes-Benz North America, cited by Al.com.
President Trump’s imposition of 25% tariffs on imported vehicles and upcoming tariffs on auto parts has pressured global automakers to localize production.
While Mercedes-Benz hasn’t confirmed if this influenced their strategy, the decision coincides with these tariffs.
Additionally, the new vehicle will be tailored for the U.S. market, aligning with Mercedes’ “local-for-local strategy” to mitigate tariff impacts.
Mercedes-Benz U.S. International employs over 6,000 people in Alabama and supports around 60,000 jobs with regional suppliers.
Despite global challenges, including a 7% decline in worldwide sales, Mercedes-Benz saw a 1% increase in the first quarter in the U.S., emphasizing the market’s strength.
This new production move in Alabama could be a strategic win amid fluctuating international markets and trade tensions.
President Trump’s tariffs have reportedly led companies to reassess global strategies and bring more manufacturing back to American soil.
The expansion in Alabama may serve as a testament to these policies’ effectiveness in revitalizing U.S. manufacturing and the national economy.
As the world watches this development, time will reveal whether Mercedes’ investment represents a broader shift back to domestic production on American soil.
Mercedes-Benz to expand production with new vehicle at Alabama plant | Click on the image to read the full story https://t.co/taQ1eRdUu1
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