Mercedes-Benz, the world’s third-biggest maker of luxury automobiles, is contracting out production of the R-Class wagon to a factory in Indiana, a move that will allow it to expand its line of U.S.-built sport-utility vehicles.
AM General LLC will start making the R-Class in mid-2015 at its underused 675,000-square-foot commercial assembly plant in Mishawaka under a multiyear agreement, the U.S. company and Mercedes parent Daimler AG said Tuesday in a joint statement.
"AM General anticipates R-Class vehicles will start rolling off its production lines this summer and it will hire and train hundreds of new workers in order to prepare for R-class production," the company said in a written statement.
The plant near South Bend currently employs 1,500 people and makes the MV-1, a wheelchair-accessible van. The R-Class was briefly sold in the U.S. but is now sold exclusively in China.
In an effort to regain the top spot in global luxury-car sales, Mercedes plans to introduce four new or revamped SUVs this year, including the new mid-sized GLE coupe unveiled at the Detroit motor show earlier this month. The Mercedes plant in Tuscaloosa, Alabama, is the German company’s main production site for SUVs.
Stuttgart, Germany-based Daimler also has a contract with Finnish manufacturer Valmet Oyj to make at least 100,000 Mercedes A-Class cars to meet growing demand for compact models.
“Within our growth strategy, we are expanding our global production network,” Markus Schaefer, Mercedes’s head of manufacturing, said in a separate statement. “We are thus increasing flexibility and continue to improve our competitiveness.”
Production at Tuscaloosa is expected to reach more than 300,000 vehicles this year compared to 235,000 in 2014, Daimler said. The plant, which started in 1997 with one model, has also been building the C-Class sedan since June.