Mercedes considers expanding production in North America

Dieter Zetsche: "For the next-generation front-wheel-drive [cars] we need additional plant capacity."

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GENEVA -- Daimler is looking to add production capacity in North America for both its compact and rear-wheel-drive models, CEO Dieter Zetsche said.

Plans are in the "very early" stages for the rear-wheel-drive vehicles and "it is totally open," Zetsche said on Tuesday on the sidelines of the Geneva auto show here.

He would not say whether Mercedes-Benz is looking to expand its factory in Vance, Alabama, or build a new plant. Mercedes just began production of the redesigned rwd C-class sedan in Alabama, primarily for the U.S. market.

Alabama builds the all-wheel-drive M- and GL-class crossovers and will add a M-class coupe crossover next year.

To cope with the shortage of front-wheel-drive cars, Mercedes is adding shifts and outsourcing some production to contract manufacturer Valmet in Finland. There are already shortages of the CLA sedan in the United States that aren't likely to be remedied until early summer.

Mercedes expects worldwide sales of its front-wheel-drive models, which include the A class not sold in the United States, to rise to 500,000 units this year from last year's 370,000.

The B-class battery electric car goes on sale in the United States in July and the GLA crossover debuts this summer.

Zetsche said there will be even more variants with the new generation of the front-wheel-drive family. "Independent of what we are planning mid-term, for the next generation front-wheel-drive [cars] we need additional plant capacity with probably a new location," Zetsche said.

The front-wheel-drive vehicles would be built in the NAFTA zone, he said. That includes Mexico where Mercedes has been considering joint production at a Nissan factory.

Zetsche would not give a timetable but said "we are evaluating different scenarios."

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