NEW YORK (TheStreet) -- Germany's Daimler (DDAIY), maker of premium Mercedes-Benz automobiles, will spend $500 million to build a new factory in South Carolina to manufacture Sprinter commercial vans, starting in 2016.
The move represents another step in Daimler's global expansion, as well as a broadening of its commitment to the southern U.S. In January, the company said it will move its U.S. headquarters from Montvale, N.J., to Atlanta -- closer to its manufacturing complex in Vance, Ala. In 2011, Mercedes-Benz paid $100 million in a 10-year naming rights deal for the New Orleans Superdome.
The Sprinter has proved popular with U.S. customers, mostly owners of businesses who use the vehicle for light-duty deliveries and hauling. Until now, Daimler has imported Sprinters from Europe, disassembling them and reassembling them here to avoid a 25% U.S. import duty. The new plant will include a body shop, paint shop and assembly line covering 200 acres.
Daimler's decision marks the latest win for business-friendly South Carolina, its recruiters and Gov. Nikki Haley. BMW and Boeing (BA) have located major operations in the state, attracting many suppliers and contractors, helping to bring higher-paying manufacturing jobs into what had been an economy more focused on agriculture.
The new investment comes while Daimler shares are on a steep six-month climb, caused in part by the European Central Bank's economic stimulus program, which has enhanced investors' enthusiasm for German stocks. Shares are up 45% since late September. In dollar terms, Daimler's American Depositary Receipts are up 20% over the same period.
Another element behind this enthusiasm for Daimler is satisfaction with the automaker's strategy for broadening its presence in the U.S., the world's most-profitable vehicle market. After an ill-fated merger with Chrysler, Daimler in 2007 sold the U.S. automaker to Cerberus, a private-equity firm.
Initially, the sale pushed the share price to its all-time high of more than €110. The global financial crisis then torpedoed the price to less than €23. About a third of the automaker's common shares are registered in Germany, according to the company. They're trading in the low €90s.
Since 2009, Daimler and Mercedes-Benz have recovered their mojo and the confidence of shareholders. The automaker is locked in a three-way battle for supremacy in the premium-vehicle segment with Volkswagen's Audi and BMW. Mercedes-Benz trails, but it has bragging rights with its top-of-the-line S-Class sedan, which outsells Audi's A8 and BMW's 7 Series.
Daimler, which sells the Sprinter under the Freightliner and Mercedes-Benz brands, started importing the vans in 2001. Last year, it sold about 26,000. Nissan (NSANY), Ford (F) and Fiat Chrysler Automobile (FCAU - Get Report) compete in the segment with vehicles that look taller and narrower than the typical commercial vans once sold by Detroit.
Starting this fall, Daimler will import another, smaller van for its U.S. lineup. Called Metris, it comes in passenger and cargo versions, starting at a price of around $30,000. Industry analysts say the commercial van business has lots of room to grow in the U.S., and Daimler is putting the pieces in place to take advantage.