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Weekly Recap: Mercedes, Volkswagen spend big as import automakers invest in North America

Import automakers are on a building frenzy in North America as resurgent car sales have prompted companies to expand their manufacturing footprints to meet rising demand. That was evidenced this week when Mercedes-Benz announced plans to build a $500-million factory to produce the Sprinter commercial van, and Volkswagen confirmed a whopping $1-billion investment to expand its massive plant in Mexico. Meanwhile Jaguar Land Rover reportedly wants to build a factory in North America, but not for at least three years, and Hyundai is said to be expanding in the southern United States. The common thread in all of this expansion? Trucks, time and money. Mercedes wants to capitalize on the burgeoning work van segment in the United States and will break ground in 2016 on a 200-acre site in Charleston, SC, to build the next-generation Sprinter. The site will have a paint shop, body shop and an assembly line, and 1,300 people will be employed when production ramps up. Why do this, when Mercedes has immense van operations in Germany? It's cheaper to build in the US for the US market. Building locally allows Mercedes to avoid import taxes, forego a complex shipping process that involves partially disassembling German-built Sprinters and naturally, reduces the time it takes to deliver finished trucks to their buyers. "This plant is key to our future growth in the very dynamic North American van market," Volker Mornhinweg, head of Mercedes-Benz Vans, said in a statement. He was speaking about Mercedes and vans, but another German automotive giant, Volkswagen, had similar motives for its mammoth expansion plans in Puebla, Mexico. The added space and production capacity will allow VW to build a three-row version of the Tiguan, and provide another crossover for its US lineup that's light on SUVs. The current Tiguan has two rows. The factory will be able to churn out 500 units daily of the larger variant, and they will be sold in North and South America. It will arrive in the US in mid-2017, a spokesman told Autoblog. VW also plans to build another crossover, a midsize seven-passenger vehicle, at its growing Chattanooga, TN, site. "Localization has become key to safeguarding our competitive position on the global market, and manufacturing the Tiguan in Mexico will bring production closer to the US market," Michael Horn, CEO of Volkswagen Group of America, said in a statement.

Smart will go electric-only in United States and Canada

By 2018, the Smart car brand will be only known as an electric vehicle manufacturer in the US. According to Automotive News, sales of gasoline-powered Smart cars will cease later this year, and Daimler will develop the product portfolio into a solely electrified one. This coincides with the upcoming launch of the new generation Smart ForTwo electric drive models this summer. Automotive News claims to have obtained a letter from Mercedes-Benz USA CEO Dietmar Exler sent to US dealers. In it, he underlines the decision to go electric-only, saying "developments within the micro-car segment present some challenges for the current Smart product portfolio," and that the change will only affect North American sales. Production of US-destined gasoline-powered Smarts will cease in April, and sales will continue until stock runs out. The current generation has been on sale from 2015, and it hasn't reached the 2014 sales peak of 10.453 units of the previous generation; last year, there were little more than 6.200 Smarts sold in the States. The first electric drive Smarts were unveiled a decade ago, but they became available in the USA five years later, initially via various trial programs, including Car2Go fleets. Related Video:

Mercedes GLE to debut in NY, will get plug-in variant

On the eve of the 2015 Detroit Auto Show, Dieter Zetsche, Chairman of Daimler AG, said that 2015 will be the "Year of the SUV" at Mercedes-Benz. This means a host of new and updated sport-utility and crossover models, kicked off with the debut of the GLE-Class Coupe (pictured above) – in 450 AMG Sport and Mercedes-AMG GLE63 variants – here in the Motor City. But there's far more in store throughout the year. First, Mercedes has confirmed it will debut the non-coupe GLE-Class – the M-Class replacement – at the New York Auto Show in April. It will share most of its architecture with the GLE Coupe revealed here in Detroit, but will also come with a plug-in hybrid option. Mercedes-Benz debuted an S-Class Plug-In Hybrid at the Los Angeles Auto Show last November, and will expand this technology to other core models in its range. First, we will see the C350 Plug-In Hybrid, which also makes its debut here in Detroit. Beyond that, Mercedes has confirmed that the GLE-Class will benefit from a plug-in option, as will the upcoming GLC-Class crossover – the renamed replacement for the GLK. No official timing has been given for the GLC, but Mercedes confirms that both it and its largest utility vehicle – the GLS-Class (currently known as the GL-Class) – will debut "later this year." Year of the SUV, indeed. Featured Gallery 2016 Mercedes-AMG GLE63 Coupe View 9 Photos Green Detroit Auto Show New York Auto Show Mercedes-Benz Crossover SUV Hybrid Luxury PHEV 2015 Detroit Auto Show mercedes glk-class mercedes gl-class mercedes gle-class mercedes glc-class mercedes gls-class