Mercedes-Benz to Manufacture New Core Vehicle in Alabama by 2027 Amid U.S. Tariff Challenges

US • Business • 05/01 13:31
Mercedes-Benz to Manufacture New Core Vehicle in Alabama by 2027 Amid U.S. Tariff Challenges

Mercedes-Benz will begin manufacturing a new 'core segment' vehicle at its Tuscaloosa County plant in Alabama in 2027. This decision highlights the company's commitment to U.S. manufacturing and its strategy to localize production amid trade tensions and tariffs under the Trump administration. The Alabama plant, a major export hub for Mercedes-Benz SUVs, will play a crucial role in the company's North American operations. The move is part of Mercedes-Benz's 'local-for-local' strategy to mitigate trade risks by producing vehicles in the markets where they are sold.

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Mercedes-Benz to Manufacture New Core Vehicle in Alabama by 2027 Amid U.S. Tariff Challenges

Mercedes-Benz will begin manufacturing a new 'core segment' vehicle at its Tuscaloosa County plant in Alabama in 2027. This decision highlights the company's commitment to U.S. manufacturing and its strategy to localize production amid trade tensions and tariffs under the Trump administration. The Alabama plant, a major export hub for Mercedes-Benz SUVs, will play a crucial role in the company's North American operations. The move is part of Mercedes-Benz's 'local-for-local' strategy to mitigate trade risks by producing vehicles in the markets where they are sold.

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A Strategic Expansion in Tuscaloosa

On Thursday, Mercedes-Benz confirmed that it will begin production of a new vehicle at its Vance, Alabama plant in 2027. While the company has not disclosed specific details about the model, it described the vehicle as part of a "core segment" and emphasized that the decision aligns with its broader strategy to deepen its presence in the U.S. market.

“Tuscaloosa has been a key hub for Mercedes-Benz vehicles for almost 30 years,” said Ola Källenius, Chairman of the Board of Management of Mercedes-Benz Group AG. “It’s a natural step to bring a further model to Alabama as part of a strategy to deepen our commitment to the United States, a market which has been our home for more than a century” MBUSI To Manufacture New 'Core Segment' Vehicle Beginning In 2027.

Jason Hoff, CEO of Mercedes-Benz North America, added that the new model will be tailored to U.S. customer preferences and will strengthen the company’s ties to the North American 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,” Hoff said Mercedes-Benz announces new vehicle for Alabama plant, coming in 2027.

Alabama Plant: A Global Export Powerhouse

Since opening in 1997, the Tuscaloosa County plant has produced more than 4.5 million vehicles. In 2024 alone, the facility manufactured approximately 260,000 vehicles, with about 60% of that output exported to 135 global markets. The plant currently assembles several high-profile models, including the GLE, GLS, GLE Coupe, and Mercedes-Maybach GLS SUVs, as well as the EQE SUV, EQS SUV, and Mercedes-Maybach EQS SUV MBUSI To Manufacture New 'Core Segment' Vehicle Beginning In 2027.

Mercedes-Benz U.S. International (MBUSI), the company’s U.S. manufacturing arm, employs more than 6,000 people directly and supports an estimated 60,000 jobs through regional suppliers, including 200 located in Alabama Mercedes-Benz announces new vehicle for Alabama plant, coming in 2027.

The company has invested approximately $7 billion in Alabama operations to date, including $1.2 billion since 2017 to support electric vehicle and battery production at its Bibb County facility.

Navigating Tariff Uncertainty

The announcement comes at a time of heightened trade tensions. Earlier this year, the Trump administration imposed a 25% tariff on imported vehicles and automotive parts, prompting several automakers, including Mercedes-Benz, to suspend their financial forecasts for 2025. The company cited the uncertainty surrounding the tariffs as a key reason for the suspension Mercedes, Volkswagen, Stellantis latest carmakers to scrap forecasts over Trump tariffs.

Despite the challenges, Mercedes-Benz executives have maintained a steady tone. “We are prepared to continue to invest billions, and we want to grow our footprint in the United States. We are committed,” Källenius said in a recent video call As President Trump eases auto tariffs, Mercedes reaffirms commitment to Alabama.

The company has also emphasized that the new vehicle announcement is part of its “local-for-local” strategy, which aims to produce vehicles in the markets where they are sold. A Mercedes-Benz spokesperson declined to directly link the new Alabama production to the Trump tariffs but acknowledged that localizing production helps mitigate trade-related risks Mercedes-Benz Alabama plant to build new vehicle amid Trump tariffs.

A Broader Industry Response

Mercedes-Benz is not alone in adjusting its operations in response to the evolving trade landscape. Other automakers, including Stellantis and Volkswagen, have also suspended financial guidance and are reevaluating production strategies. The Trump administration has offered some relief, including exemptions from steel and aluminum tariffs and credits for U.S.-assembled vehicles Trump tariffs live updates: Trump administration quietly reaches out to Beijing to kick off tariff talks.

Still, the 25% tariff on imported vehicles remains in place, and Mercedes-Benz has acknowledged that its European-made powertrains present a logistical challenge under the current trade regime Mercedes-Benz announces new vehicle for Alabama plant, coming in 2027.

Reinforcing U.S. Roots

Mercedes-Benz’s decision to expand production in Alabama reflects a long-standing relationship with the U.S. market. The company has operated in the country for over a century and continues to view the U.S. as a critical component of its global strategy.

“We’re also an American company,” Källenius said. “Yes, we have our headquarters in Germany, and we have European origins, but we feel American” As President Trump eases auto tariffs, Mercedes reaffirms commitment to Alabama.

With the addition of a new core segment vehicle in 2027, the Tuscaloosa plant is poised to further solidify its role as a cornerstone of Mercedes-Benz’s global manufacturing network.

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