Mercedes-Benz is doubling down on its U.S. manufacturing footprint with plans to build a new vehicle at its Tuscaloosa, Alabama, facility by 2027. The announcement comes as global automakers grapple with President Donald Trump’s revived 25% tariffs on imported vehicles. While Mercedes-Benz declined to specify whether the decision is a direct response to the tariffs, the company emphasized its “local-for-local” strategy—producing vehicles in the regions where they’re sold. That strategy now includes what the automaker calls a “core segment” model, to be localized at the same plant that currently builds the GLE and GLS SUVs.
“We are getting even closer to the U.S. customer by localizing a core segment model in Tuscaloosa,” said Mercedes-Benz North America CEO Jason Hoff. “This move strengthens our ties to the North American market where a range of Mercedes-Benz vehicles have their roots.”
Tuscaloosa has long served as a cornerstone of Mercedes’ global SUV production strategy. Roughly 60% of the SUVs built at the plant are exported, making it one of the company’s most important international hubs.
But the decision to increase production on U.S. soil is part of a broader industry trend, as automakers brace for escalating tariffs on both fully assembled vehicles and parts. As of this weekend, an additional round of 25% tariffs on automotive components is set to take effect.
What Other Automakers Are Doing
Mercedes-Benz is not alone in adjusting its manufacturing footprint:
- BMW is reportedly considering adding production shifts at its Spartanburg, South Carolina, plant, potentially increasing output by up to 80,000 units per year. The facility already serves as BMW’s global SUV hub and is the top U.S. vehicle exporter by value, shipping more than $10 billion in vehicles abroad last year.
- Honda is shifting production of its popular Civic model from Japan to the U.S.
- Hyundai recently pledged $20 billion in U.S. investment, including a $5.8 billion steel plant in Louisiana
- Kia plans to produce hybrid vehicles in Georgia
- Nissan is evaluating the possibility of moving production from Mexico to U.S. plants in light of trade policy shifts.
- Stellantis is reopening its Belvidere, Illinois, factory to manufacture a new midsize pickup
- Toyota is ramping up hybrid vehicle production at its West Virginia plant
For now, BMW doesn’t seem to plan any major production shifts. Instead, most of the current car prices are being protected through May. The only difference is the pricing for the 2 Series Coupe and its M2 sibling which is up 4%. As a refresher, the G42 and G87 are exclusively built in Mexico at the San Luis Potosí plant. It’s too early to say how much longer BMW will be able to shield customers from higher prices to offset the newly imposed tariffs.