German luxury car maker Daimler said yesterday that it will manufacture its popular C-Class automobiles at a US plant in Tuscaloosa, Alabama, moving closer to a major market and reducing its exposure to foreign exchange effects.

But the move, against which Daimler workers protested on Tuesday, does not signal a major shift in Daimler's strategy, chief executive Dieter Zetsche said in a statement.

"Germany is and remains the heart of our production network," he stressed.

The move to Tuscaloosa "is essential for strategic and operational reasons, so that Mercedes-Benz remains competitive and can fully utilise future growth opportunities," Mr Zetsche said.

The group also plans to shift work on its SL sport models to the core southwestern German plant in Sindelfingen, where workers had demonstrated, and to focus on making C-Class cars for the European market in northern Bremen.

Daimler did not plan to eliminate jobs at the two German plants, it said, but Sindelfingen workers had hoped to take part in making the new C-Class cars.

Global auto makers including Daimler's German rival BMW have increasingly sought to produce cars in or near major markets to limit foreign exchange effects and take advantage of lower costs.

Overall, Daimler plans to produce 60 per cent of its C-Class cars in Bremen, 20 per cent in Tuscaloosa, 10 per cent in China and 10 per cent in South Africa.

The shift in production of the SL roadster to Sindelfingen is expected to result in a rise in production volumes of about 20 per cent from 2014, the company said.

Meanwhile, some 1,800 Sindelfingen workers "will be offered attractive employment opportunities" elsewhere, the group said without providing details.

The plant currently employs more than 28,000 workers.

US workers in Alabama now manufacture M-, R- and CL-Class sports utility vehicles, and that plant produced 152,561 vehicles in 2008.

Mercedes-Benz sold around 251,000 cars in the United States last year, compared with global sales of about 1.13 million vehicles.