Mercedes-Benz expands Alabama plant with new vehicle amid tariff changes
- Mercedes-Benz will localize production of a core segment vehicle at its Alabama plant by 2027.
- The Alabama plant currently serves as a global export hub, producing a large percentage of SUVs for international markets.
- This move reflects a strategy to strengthen ties to the North American market, which underscores the company's commitment to local production amidst tariff challenges.
Located in Tuscaloosa, Alabama, the Mercedes-Benz manufacturing plant announced plans to add a new vehicle by 2027. This decision marks a significant move towards localizing production in the United States, aligning with a strategy to strengthen the company’s ties to the North American market. Over the years, the plant has become vital to Mercedes-Benz's operations, producing over 4.5 million vehicles since its opening in the 1990s. Currently, roughly 60% of the SUVs manufactured there are exported to various countries. The move to introduce a new vehicle follows the response to President Donald Trump's auto tariffs, which were implemented in early April 2025, posing challenges to automakers who rely on imported vehicles and parts. Notably, the tariffs amounted to 25% on imported passenger cars and light trucks, along with additional levies on key auto parts scheduled to take effect in early May. However, the Trump administration also announced a temporary reduction in the impact of these tariffs, which indicated a desire to encourage manufacturers like Mercedes-Benz to assemble more vehicles within the U.S. Mercedes-Benz North America CEO Jason Hoff explained that this new development is part of the company's efforts to enhance its local presence, emphasizing the importance of the U.S. market for vehicles like the GLE and GLS models. While the details regarding the new vehicle remain undisclosed, this expansion underscores Alabama's strategic role in the company's global production network. Alabama Governor Kay Ivey welcomed the news and acknowledged the confidence shown by global companies in the state’s workforce and business environment. As competition and market dynamics change, the automotive industry faces ongoing scrutiny regarding tariffs and localization efforts. The decision by Mercedes-Benz to expand operations in Alabama could signal a broader trend among automakers to adapt and thrive in a challenging economic landscape marked by trade policies and changing consumer preferences.