Mercedes-Benz Vans will spend about $500 million to build a full van manufacturing plant in North Charleston, the company announced Friday. The plant will build Sprinter vans from the ground up instead of reassembling vans shipped in pieces from Germany, as the company’s Charleston County operation does now.
The plant is expected to create 1,300 jobs over the next several years, the company said. It will rise on about 200 acres off Palmetto Commerce Parkway, with a new body shop, paint shop and assembly line. Construction is scheduled to begin in 2016.
“Today is a very important day for Mercedes-Benz Vans and certainly also a very significant day for the Charleston area,” Volker Mornhinweg, head of Mercedes-Benz Vans, said in the announcement. “We are investing around half a billion dollars to create a top-notch Mercedes-Benz van plant here in South Carolina. This plant is key to our future growth in the very dynamic North American van market.”
The new plant will build the next-generation Sprinter for the North American market under both the Mercedes-Benz and Freightliner brands, according to the company. With it, Mercedes-Benz Vans will become one of the biggest industrial employers in the region, the company said.
From kits to a full factory
Mercedes-Benz Vans, a division of Germany’s Daimler AG, has run its van assembly operation in Charleston County since 2006, the company said. The company said it now faces high U.S. import duties and a complex process of taking apart Sprinters made in Germany for sale in the United States.
Building the vans in South Carolina will let the company meet growing demand from North American customers more economically and considerably reduce delivery times, according to the announcement. The company called the U.S. plant strategically essential, saying it expects the large van segment to grow rapidly in North America over the next few years.
Mornhinweg said Charleston is an excellent location for the plant. “The region has very highly skilled workers, a dense network of reliable suppliers, and an outstanding logistics infrastructure that includes good transport connections to the nearby harbor,” he said. He also pointed to “the very good cooperation and support we’ve experienced at the local, municipal, and state levels.”
The Sprinter’s U.S. market
Mercedes-Benz Vans delivered about 26,000 Sprinters to U.S. customers in 2014, making the United States its second-largest market after Germany, the company said. The Sprinter has been sold in the U.S. since 2001 and holds about 9% of the country’s large van market. Worldwide, more than 2.8 million Sprinters have been delivered in about 130 countries since the van was introduced in 1995.
“The Sprinter founded the large van segment and has always set the standards for safety, efficiency and quality in its vehicle class,” Mornhinweg said.
Besides the Sprinter, Mercedes-Benz Vans will add the Metris line of medium-size vans to its U.S. lineup this fall.
State incentives and reaction
The state Coordinating Council for Economic Development approved job development credits and a $14 million Closing Fund grant to help pay for real property improvements tied to the project, according to the announcement.
“Today’s announcement builds on a decade of success for Daimler and Mercedes-Benz in the South Carolina Lowcountry, and we couldn’t be happier to be the home of their first full manufacturing facility for vans in North America,” Gov. Nikki Haley said. She called the 1,300 jobs “a big boost to the region.”
Secretary of Commerce Bobby Hitt said the project alone “will grow automotive-related jobs in the tri-counties by about 20 percent,” according to the S.C. Department of Commerce.
North Charleston Mayor Keith Summey said the announcement “is truly transformative to our business landscape, validating North Charleston as an automotive manufacturing hub.”
Jim Newsome, president and CEO of the S.C. State Ports Authority, said the agency looks forward “to continuing to serve Daimler’s growing import-export needs through our Charleston facilities.”
A global van business
Mercedes-Benz Vans makes vans at nine locations in Germany, Spain, the United States and Argentina, as well as in China through a joint venture and in France through its alliance with Renault-Nissan, the company said. Western Europe accounts for 65% of its van sales.
The new plant is part of a strategy the company calls “Mercedes-Benz Vans goes global,” which aims to expand the business worldwide, including in South America, Asia and the Russian van market, according to the announcement.
