Daimler May Slow US Expansion Because the Dollar Is Too Strong

Feb 26, 2015 08:30 AM EST | Jordan Ecarma

Daimler's head of labor has said the company will reconsider plans to expand production in the United States if the dollar stays too strong against the euro.

As announced last October, the German auto group has been planning to move production of its Mercedes-Benz Sprinter vans from Duesseldorf, Germany, to somewhere in North America; however, currency shifts may mean a change of plans, Reuters reported.

The United States is the biggest market for that particular van model after Germany; most Sprinters sold in the U.S. are currently manufactured as kits in Duesseldorf and Ludwigsfelde and then set to Charleston, S.C., to be assembled.

Since Daimler resolved to expand U.S. production, the euro has fallen in value against the dollar, dropping from an exchange rate of $1.35 about a year ago to $1.14 now and making European production more competitive.

"If the situation stays like this over a longer period, then the question is: Do I go in now, or can I do it later," said Daimler labor chief Michael Brecht, as quoted by Reuters.

Last year, Daimler said it planned to build a factory in Aguascalientes, Mexico. Another expansion scheme was to start manufacturing four-cylinder engines for Mercedes at a Nissan plant in Tennessee.

C-Class sedan production will additionally shift from Bremen, Germany, to a Daimler plant in Tuscaloosa, Ala., the company said in September.

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