Mercedes-Benz is bumping production of its R-Class wagon to an assembly facility in Mishawaka, Ind., to make room for four new or refreshed sport utility vehicles that will launch this year.
The automaker will contract out R-Class production to AM General LLC through a multi-year agreement between AM General and Daimler, parent company to Mercedes, Businessweek reported.
Mercedes wants more room at its Tuscaloosa, Ala., plant to manufacture the new SUV offerings, which will include the M-Class, GL-Class and the new GLE Coupe. The automaker plans to amp production up to around 300,000 vehicles annually starting this year, compared with 235,000 in 2014.
"With the introduction of the new GLE Coupe and the continuing strong demand for SUVs, Plant Tuscaloosa needs all available production capacities for this segment," Jason Hoff, president and CEO of the Mercedes U.S. sales division, said in a statement.
AM General has worked with other carmakers in the past, including General Motors and Ford.
"AM General is pleased to have been selected by Mercedes-Benz to build this vehicle at our world-class commercial vehicle facility in Mishawaka. We look forward to a long term relationship with Mercedes and expanding our services to the U.S. and global auto industry," said Charlie Hall, president and CEO of AM General.
The American company, which is primarily known as for producing military vehicles, is Mercedes-Benz's "first and only" U.S. manufacturer under contract.
"AM General anticipates R-Class vehicles will start rolling off its production lines this summer and will hire and train hundreds of new workers in order to prepare for R-class production," the company said in a statement.