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Volkswagen and Mercedes-Benz Expand U.S. Manufacturing to Counter 2027 Tariffs
Volkswagen and Mercedes-Benz are expanding U.S. manufacturing to offset 25% tariffs, boosting local production in Alabama and South Carolina by 2027.
Why Are Volkswagen and Mercedes-Benz Expanding U.S. Production?
Volkswagen and Mercedes-Benz are increasing U.S. manufacturing to mitigate the 25% tariffs on imported vehicles imposed by the Trump administration in April 2025. Mercedes-Benz will produce its GLC SUV at its Tuscaloosa, Alabama plant starting in 2027, while Volkswagen is investing $2 billion in a new Scout Motors factory in Blythewood, South Carolina for electric off-road vehicles. These moves aim to localize production and reduce import costs.
What Is the Impact of These Manufacturing Expansions?
The expansions will create jobs and stimulate economic growth in Alabama, Tennessee, and South Carolina, with production timelines set for 2027. By manufacturing locally, both companies can lower vehicle prices for U.S. consumers, avoiding tariff-related cost increases. The focus on SUVs and electric vehicles aligns with rising U.S. demand for these models, strengthening market competitiveness.
How VW and Mercedes On-shoring Production Matters to Consumers
Consumers can expect more affordable Volkswagen and Mercedes-Benz vehicles as tariff costs are reduced, with new electric and off-road models hitting the market by late 2027. Investors may see long-term growth potential as both companies strengthen their U.S. market presence and adapt to trade policies. Curious about specific models or job opportunities?
Citation
- U.S. Department of Commerce. (2025, April). Fact Sheet: Impact of 2025 Automotive Tariffs.
- CNBC. (2025, May 28). Volkswagen’s Scout Motors Plans $2B U.S. Factory Amid Tariff Push.
- Reuters. (2025, May 27). Mercedes-Benz, Volkswagen Ramp Up U.S. Production to Avoid Tariffs.
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