Mercedes-Benz US International has started exporting SKD kits of its third generation M-Class SUV to India, Indonesia and Thailand from its Tuscaloosa facility in Alabama in a move designed to get around the high costs of exporting the model as a finished vehicle.
Each target market has protectionist trade policies that include high tariffs, import fees and customs restrictions, which have made the final sale price of the vehicle in the countries prohibitively expensive.
BLG Logistics is assembling the kits for shipment. The logistics provider coordinates the sequencing of vehicle parts for Mercedes' just-in-time vehicle assembly in Tuscaloosa from a separate facility and has now added an 8,400-square metre warehouse for handling kit assembly for the Asian nations. "We are especially proud of this new project as we expand our local services and extend the BLG Group's tradition as provider for Daimler's global SKD/CKD production," said Steven Markham, president of BLG.
The kits are being transported by rail from Tuscaloosa for ocean forwarding from the port of Savannah. Final assembly will be carried out at Mercedes facilities in Pune, (India), Wanaherang (Indonesia) and Samutprakan (Thailand).
Schaefer said this week that the move will increase Mercedes sales in each of the countries, which have been limited by the protectionist trade policies, by making them more competitively priced.
A fully assembled M-Class shipped to India costs around $200,000 to buy there because of the tariffs and fees. By comparison, Mercedes can sell the same 2013 M-Class sold in the US for between $47,270 and $96,100.
Schaefer said the kits would increase production for Mercedes' US automotive suppliers and result in more jobs for the suppliers and at the Tuscaloosa plant, which will build and paint the vehicles’ bodies.
Mercedes' assembly plants in India, Indonesia and Thailand already assemble C-Class, E-Class and S-Class vehicles from kits assembled at warehouses near Mercedes plants in other countries.
The carmaker's new second generation GL-Class SUV will be added to the SKD exports in May 2013.