Daimler vows to include more US content in cars

30 May, 2017

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Daimler AG, the parent firm of Mercedes-Benz cars, announced its interest in adding more local content on the vehicles it produces at its Alabama facility, a move perceived as response to reports about President Donald Trump highlighting the German car maker's role in a US$ 15.4 billion automotive trade deficit with Germany.

Daimler, BMW AG and Volkswagen AG import cars to the U.S. from several markets, but they also build models in southern states.

Mercedes-Benz produces the GLE and GLS SUVs, along with the C-Class sedan in Alabama. BMW South Carolina plant is the automaker's largest production site in the the world and the sole global producer of several BMW X models. These vehicles are exported to more than 140 countries.

Also, several models Volkswagen sells in the U.S. market are built in Mexico, while Mercedes-Benz and BMW currently build manufacturing plants in the country aimed to start operations in 2018 and 2019 respectively.

Mercedes-Benz recently told its suppliers that it "sees value" in using more companies with locations in the state as it continues to invest in its Tuscaloosa factory.

“Having more local suppliers increased overall flexibility, reduced transport times and improved manufacturing and logistics costs. Overall, this results in considerably increased efficiency," the company said in a statement.

Mercedes-Benz uses a relatively high percentage of suppliers with U.S. locations among the foreign auto makers operating in the country. For example, the 2017 GLS-Class sport-utility vehicle built in Alabama consists of 60% parts made in the U.S. or Canada, according to the National Highway Traffic Safety Administration.

The Mercedes C-Class sedan, also built in Alabama, uses among the highest concentration of parts supplied by U.S. or Canadian components makers at 80%, according to NHTSA. Daimler said it uses nearly 200 U.S.-based suppliers at its Tuscaloosa facility.

Mercedes is in the midst of a US$ 1.3 billion expansion at the plant, which includes a new body shop and modifications to its SUV assembly shop. The auto maker has invested US$ 4.5 billion in the plant since it opened in 1995. Last year, the plant produced more than 300,000 vehicles.

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