Over the past two years, sales of SUVs from virtually all automakers have sagged deeply as fuel prices have risen and the economy has gone into the dumper. Mercedes-Benz is no exception, as sales of its ML, GL and R-class have dropped from a combined 152,500 in 2008 to just over 83,000 so far this year. At the same time, the U.S. dollar has lost significant value against most world currencies, including the Euro. The declining dollar makes it increasingly difficult for companies importing cars to the U.S. to make a profit, especially on low end models.
For Mercedes, this may be the perfect time to shift some production of its smallest model currently offered in the U.S. to its American plant, the sole global source of the aforementioned SUVs. The plant in Vance, Alabama could soon add production of the C-Class which is also the company's top seller in this market. At a media briefing in New York Thursday, CEO Dieter Zetsche acknowledged that a decision on U.S. production of the C-Class would be made soon. If it happens, it will give Mercedes a significant cost advantage on those cars. That cost advantage could allow Mercedes to reintroduce smaller, four-cylinder engines in the C, which is currently only offered with a V6 in the U.S.