TUSCALOOSA, Ala. (TheStreet) -- The Mercedes C-Class may be known as the brand's best selling luxury car in the U.S. But now it also can claim the title of the only Mercedes sedan being produced in America.

"It was about time to have our best selling sedan in America, being built for Americans, in America," said Mercedes Benz Chief Dieter Zetsche in an exclusive interview with TheStreetTV.

In 2013, Mercedes C-Class sales peaked at 88,251 and were down about 28% in the first half of 2014. Industry watchers said moving production of the C-Class to the U.S. was a savvy move. Edmunds.com auto analyst Jeremy Acevedo said, "I think that the assembly location is a non-issue for the overwhelming majority of shoppers, particularly in the luxury segment. For the minority that does care, a subset of that might miss the German construction while an equally large subset might be appreciative of the domestic assembly."

Production of the newly designed C-Class started this summer, but the first step was getting the Tuscaloosa plant up to speed to build a sophisticated sedan. The plant, which has produced SUVs since 1997, had to undergo several changes to be ready for production.

Jason Hoff, CEO of Mercedes-Benz U.S. International, the manufacturing arm of Mercedes, said the biggest changes to the plant were in the body shop. "The C-Class is a very advanced technology. From a materials standpoint, it uses aluminum, it uses forged aluminum, the joining technology of the different body parts are things that we hadn't done on SUVs," Hoff said.

The all new C-Class, which is hitting showrooms now, is priced at roughly $41,000, about $1,000 more than 2013's model. Zetsche said, "We do not want to give away our vehicles but we do think these vehicles warrant a premium and that is expressed in our pricing. But of course, there has to be more value for that vehicle."

Industry watchers said Mercedes' success will rest on its ability to differentiate itself form other carmakers who are also packing more technology into their cars at a lower price point.

Bart Herring, general manager of product management at Mercedes, said that "what you'll notice with the C-Class right away, looks-wise is the S-Class. We've added a lot of that same technology and when you get inside the C-Class, you'll notice right away the switch gear, whether it's the window switch or the door pulls, the control interface, all those things are taken directly from the S-Class and it really does raise the level of luxury and comfort." 

While Mercedes is excited this fall is about the new C-Class, next year the company will start production of another as-yet unnamed SUV at the Tuscaloosa plant, bringing total production in the U.S. close to 300,000 units a year.

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