German automakers to focus on boosting local production in U.S., PwC says

Mercedes-Benz will start assembling the new C-class sedan at its Alabama plant this year.

BERLIN (Reuters) -- German automakers will focus on the United States for boosting local production this year and next, tapping reviving demand in the world's second-largest car market as Europe keeps struggling, according to PricewaterhouseCoopers.

The number of passenger cars assembled by German manufacturers in the U.S. may rise almost 12 percent this year to over 700,000 vehicles, PwC said today.

That's the highest rate of output growth projected for German carmakers in any world market, PwC said, adding that U.S. output may even rise by 30 percent in 2015.

"The dynamics of growth [at German manufacturers] have returned to the U.S.," said Felix Kuhnert, a regional head at PwC's automotive division.

Daimler's Mercedes-Benz division will start assembling the new C-class sedan at its Tuscaloosa, Alabama-based plant this year while Volkswagen's Audi brand will shift production of the Q5 SUV from Germany to a new factory in San Jose Chiapa, Mexico from 2016.

German auto production in China, the world's biggest car market, may rise only 3 percent this year, after surging by 20 percent or 600,000 vehicles in 2012, PwC said.

Global production by the entire industry may rise 6 percent to 87.4 million passenger cars and light vehicles, according to PwC.