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South Carolina Gov. Nikki Haley, left, and Volker Mornhinweg the head of Mercedes-Benz Vans chat on March 6, 2015 after a news conference in North Charleston, S.C.

Bruce Smith/The Associated Press

Mercedes-Benz Vans will build a new assembly plant for its Sprinter vans in South Carolina, investing a half-billion dollars and creating 1,300 jobs, the company announced Friday.

The company said the plant will allow vans to be more economically produced for the growing domestic market. It will manufacture them under the Mercedes-Benz and Freightliner nameplates.

Last year the company, a division of Daimler AG, sold almost 26,000 Sprinters in the United States, second only to sales in Germany.

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"Given the future growth in the North American market, it simply does not make sense to supply customers with imported vehicles," Volker Mornhinwig, the head of Mercedes-Benz Vans said at a news conference at the existing Daimler assembly plant.

The announcement brings another major assembly plant to the South where the footprint of the auto industry continues to grow.

The company's existing South Carolina operation reassembles Sprinter vans that are made in Germany, disassembled and then shipped to North Charleston. The process is used because of high duties on importing finished vehicles.

Construction of the new plant begins next year on a 200-acre site adjacent to the existing facility. Mornhinwig would not say when production would begin or how many vans the plant would produce. About 80 per cent of Sprinter vans are sold to commercial businesses.

While 140 workers are currently employed at the existing plant, that number will increase by 60 later this year when the company begins selling its new mid-sized Metris domestically. The vans will be assembled in Spain, disassembled and sent to South Carolina for reassembly.

Mornhinwig said the company looked at sites in three states and two in Mexico before settling on North Charleston for the new assembly plant.

He said the decision hinged on the local workforce, a supplier network and infrastructure, including the nearby Port of Charleston. The plant is about 20 miles from downtown Charleston.

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State incentives include job development credits and a $14 million grant for property improvements.

Gov. Nikki Haley, who is strongly anti-union, said the state's pro-business climate and non-union workforce were also important. The existing plant is not unionized.

"What we do with our companies is say take care of those who take care of you," she said. "The associates like that direct relationship that they have with their employer. They don't want that middleman."

Seven states in the South each now have more than 70,000 people employed in the industry, according to the Center for Automotive Research in Ann Arbor, Michigan. Jobs range from assembling vehicles and manufacturing parts to working at dealerships.

In South Carolina, with its BMW assembly plant in Greer, that number is approaching 60,000.

Mercedes-Benz was among the first companies to open an assembly plant in the region and its Alabama factory has been in operation nearly two decades.

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Mornhinwig says the industry in the region "has a very solid foundation" with other plants following and the development of an extensive supplier network.

Access to markets and infrastructure is key, he said. "It's a huge amount of money you can throw out of the window if you are in the wrong place," he said.

14:23ET 06-03-15

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