Mercedes Eyes Mexico for Small-Car Production

Daimler AG's Mercedes-Benz Cars unit is considering a plan to make the next generation of the Mercedes CLA compact sedan at partner Nissan Motor Co.'s factory in Aguascalientes, Mexico, Automotive News reports.

CEO Dieter Zetsche tells the newspaper that Mercedes wants to build more vehicles in North America to reduce the impact of currency fluctuations. He says the company will make its decision by early next year, and production would start in 2018.

The first generation of the CLA sedan, which goes on sale this autumn, will be built exclusively at Daimler's plant in Kecskemet, Hungary. That facility began producing the coupe version of the car in January.

The company formed a joint venture with the Renault-Nissan three years ago to share development and production of cars, engines and drivetrains. Daimler hinted last month that it might make vehicles at the Aguascalientes factory. Nissan would expand that plant if it adds Mercedes output, according to Zetsche.

Daimler's car unit currently builds the M-, GL- and R-Class luxury crossover vehicles at its facility in Alabama. It plans to add production of C-Class cars there next year.