February 7, 2008 -- Mercedes-Benz has elected to produce the next generation CLS-Class at its giant plant in Sindelfingen, Germany, according to company spokesperson Eberhard Haller. The news will come as a blow to both Karmann and Magna Steyr which were vying for the contract and drives another nail into the coffin of contract manufacturers, already dealing with the potential loss of Bertone in Italy. Earlier this month, Mercedes board member responsible for production Rainer Schmückle, said that Mercedes was considering transferring production of the model to Karmann or Magna Steyr. Haller said that "discussions have ended. Our results show that we ourselves can do the best job of producing the model. "Significance: Advances in platform flexibility and production techniques have resulted in OEMs increasingly opting to manufacture low-volume models in-house rather than produce at specialist assembly contractors.

The next generation CLS will not migrate from the current W211 platform, which it shares with the E-Class until as late as 2011. The next generation E-Class is due out next year. How Mercedes will manage the two platforms without involving contract manufacturers is as yet unclear.

Source: Global Insight Daily Analysis