Daimler AG, the parent company of Mercedes-Benz, said it plans to invest more than $2 billion to upgrade and retool its U.S. plant in Tuscaloosa, Alabama, in order to begin building the C-Class (from 2014) as well as the new generations of the R-Class and the G-Class models.

The latest announcement comes as Mercedes-Benz is engaged in a fierce battle with BMW for the top spot in the luxury car segment in the States, after 11 years of Lexus’ dominance in the market.

Dr. Dieter Zetsche, Chairman of the Daimler Board of Management and Head of Mercedes-Benz Cars, said:

“Tuscaloosa was the first production location of Mercedes-Benz Cars ever outside Germany, and today it is among our best. As our ‘pioneering plant’, it is also the blueprint for our new operations in emerging markets.”