In pursuit of significant cost reduction, Daimler AG is considering moving some of its production of the Mercedes-Benz C-Class from Germany to the United States, according to Germany newspaper, the Stuttgarter Zeitung.
Most likely, the transfer would be made to its plant in Vance, Alabama, as part of a wider production shake-up to reduce costs.
Currently, the production of the Mercedes-Benz C-Class is done in Sindelfingen, near Stuttgart. The report further said that in the future, the C-Class sedan would be built in three locations: Bremen, Germany; Vance, Alabama, and China.
The potential savings are huge. If the Vance facility builds 80,000 C-Class cars annually, it would save Mercedes about 64 million euros (or $95 million).
First of all, the average hourly wage at the U.S. factory is about 30 euros compared with 50 euros in Germany. The move would also allow Daimler to avoid swings in the value of the U.S. dollar against the euro, and save import duties and freight costs.
The Vance plant is ideal for the move because while it already builds the M-, GL- and R-Class models, it still has spare capacity.
In the first eight months of the year, the plant built 66,710 units, down from 136,138 the year before. The C-Class is Mercedes' top-selling car in the United States. It sold 34,432 units in the first eight months, down from 50,593 the year before.