Mercedes-Benz to invest $1.3bn to expand US production

German luxury automaker Mercedes-Benz said Friday it would invest $1.3 billion to expand and upgrade SUV production at its Alabama plant.

Mercedes-Benz, a division of Daimler, said the improved facility in Tuscaloosa would support 300 new jobs and have end-to-end digitization of production processes as part of a "smart factory approach."

"In this way we can produce the next SUV generations even more flexibly, efficiently and in proven top quality," said Markus Schaefer, a Mercedes-Benz executive for cars, manufacturing and supply chain management, in a statement.

Hybrid versions will be among the future sport utility vehicle generations to be built at the plant, said US unit Mercedes-Benz US International.

The Tuscaloosa plant, established in the southern state in 1995, produced more than 232,000 vehicles in 2014 and is on track to top 300,000 this year, the company said.

Mercedes-Benz sold nearly 221,000 vehicles in the US in the first eight months of the year, up 7.3 percent from a year ago.