Exler provided a more reflective outlook, telling Automotive News that SUVs are “the perfect vehicle for the United States.”

“Americans like their space,” he said. “They like the convenience of SUVs. The U.S. demographically will stay as a suburban country.”

In addition to Alabama, the C class is made in Bremen, Germany; East London, South Africa; and Beijing. C-class production from the U.S. could head to Mercedes’ South Africa plant, which produces C-class sedans for export to right- and left-hand drive markets. That plant has 25 percent production capacity available, according to LMC data.

Meanwhile, the Alabama factory is amid a $1 billion expansion as it preps to launch electric vehicles. Mercedes predicts its EQ subbrand of EVs could account for 15 to 25 percent of its global sales by 2025.

Local production of the EQGLE crossover is expected to begin in the second quarter of next year, followed by the EQGLS SUV in 2022.

Those plans represent even more competition for the U.S. factory’s production capacity.

The decision facing Mercedes’ U.S. plant is symptomatic of the seismic shift in consumer tastes away from sedans. That shift is especially pronounced in the luxury segment, where consumers want it all — comfort, performance and roominess.

Crossovers and SUVs accounted for 64 percent of new luxury-vehicle sales in the U.S. last year, according to the Automotive News Data Center. That share is up 14 percentage points from 2015.

“That’s leading to a lot of tough decisions in the industry on the car side of the business,” Schuster said. “This is one of them.”





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