Mercedes-Benz (Thailand) plans to manufacture the electric GLC sport utility vehicle (SUV) locally, using domestically sourced components to strengthen Thailand's auto supply chain and electric vehicle (EV) production.

Christian Schell, president and chief executive of the firm, said the new model is scheduled for delivery to customers between the first and second quarters of 2027.

The announcement comes as the Thai government prepares a new excise tax structure designed to encourage automakers to invest in local EV production and increase the use of locally made parts, reducing reliance on imported vehicles.

"We reaffirm our commitment to investment in Thailand, which remains a key growth market in the region," said Mr. Schell. "We are confident in the government's supportive policies for investors."

Mercedes-Benz expects strong demand for the electric GLC, which is the first model developed on its new electric architecture for mid-size vehicles platform. The vehicle is expected to carry a starting price of less than THB 3.7 million (US$ 110,810), debuting at the 2026 Thailand International Motor Expo later this year.

Ongoing geopolitical tensions, including the Russia-Ukraine war and conflicts in the Middle East, continue to influence global energy prices and support consumer interest in EVs.

"The duration of these conflicts remains uncertain, and concerns over potential increases in oil prices have encouraged more consumers to consider EVs," Mr. Schell said.

Many prospective buyers are likely to postpone purchases in anticipation of intensified competition and attractive pricing campaigns from automakers later this year, he said.

Despite the growing influx of Chinese EV brands into Thailand, Mercedes-Benz is not concerned about heightened competition as most Chinese manufacturers focus on the mass market, while Mercedes-Benz operates in the premium segment where customers generally maintain strong purchasing power, he said.

To support sales amid a slowing economy, Mercedes-Benz recently announced price reductions for 11 models, with discounts reaching as much as THB 1.03 million. The company reported that local EV sales surged by more than 130% year-on-year.

Globally, battery EVs recorded the strongest growth, increasing by 50% from the same period a year earlier.