Mercedes-Benz Shifts GLC Production to Alabama

Mercedes-Benz is relocating production of its best-selling GLC SUV to its Alabama facility, a strategic move driven by import tariffs. The decision aims to mitigate the financial impact of duties on vehicles shipped from its Bremen, Germany plant.

Tariffs Reshape Luxury Car Strategy

The shift is a direct response to a 15 percent tariff currently applied to SUVs imported from Europe. This cost significantly impacts sales of the GLC, which accounts for nearly 25 percent of Mercedes-Benz’s US sales volume – approximately 70,000 units annually across the US and Canada.

Production Timeline and Investment

Production of the combustion engine GLC is expected to begin in Alabama in the “next few years,” with AutoForecast Solutions predicting late 2027. Mercedes-Benz CEO Ola Källenius stated to Automotive News that full production capacity isn’t anticipated until 2029.

$7 Billion Investment in US Operations

This move is part of a substantial $7 billion investment in Mercedes-Benz’s US operations through the end of the decade. Approximately $4 billion will be allocated to the Alabama facility near Tuscaloosa, where the GLE and GLS models are already manufactured.

Alabama Plant Capacity Expansion

The investment aims to increase the Alabama plant’s annual production capacity from 250,000-300,000 units to around 340,000. The plant has experienced underutilization due to slower sales of the electric EQS SUV, which will be moved back to Germany to create space for GLC production.

While most GLCs produced in Alabama will serve the North American market, the facility will continue to export GLE and GLS models globally.