Daimler increases investment on North American auto plants

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U.S. automakers are dealing with increasing pressure amid sluggish demand in the country, as Asian and European auto companies strongly increase vehicle production in North America, including a recent investment by Daimler.

In the recent move, Daimler prepares to invest $1 billion to broaden its Mercedes Benz assembly plant near Tuscaloosa, Alabama, to provide batteries and electric sport utility vehicles that would take on Tesla Inc’s models, according to a person informed on the matter. The Wall Street Journal reported the investment previously on Thursday.

Daimler’s move to produce electric Mercedes Benz automobiles in the United States comes as the automaker stopped U.S. sales of Mercedes Benz diesels under examination by U.S. environmental regulators.

A Daimler spokesperson stated on Thursday the company prepared an official announcement about its plans later in the day.

Daimler is joining a rush to generate vehicle-making capacity in a market that a lot of experts and industry executives expect to contract reasonably over the next several years, after record sales of 17.55 million vehicles in last year.

Undoubtedly, Detroit’s automakers indeed temporarily idling factories and laying off employees as demand slows for their sedans and luxury vehicles.

Worldwide automakers have come under pressure from President Donald Trump’s bid to suppress imports and hire more employees to develop vehicles and trucks in the nation.

The burst of investments to broaden U.S. automobile production capability likewise reflects magnified competition for market share in the world’s most profitable automobile market.

Rival German luxury automaker BMW AG stated in June it would broaden its U.S. factory in South Carolina, adding 1,000 jobs.

Japan’s Toyota Motor and Mazda Motor stated in August they would join forces to construct a new U.S. factory efficient in producing up to 300,000 vehicles annually, with 4,000 new jobs.

Honda Motor today stated it would increase production of Accord models at a factory in Ohio.

Volvo Cars, the Swedish brand owned by Geely Holding Group, is planning a second production line at a factory in South Carolina that is still under construction.

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