Mercedes-Benz is launching production of its new C-Class in Alabama, marking the first time the German automaker has built luxury cars in the U.S.

Until now the Tuscaloosa plant, founded in 1995, has solely produced SUVs and CUVs for North America and export markets.

The Alabama plant started production in 1997 with the original body-on-frame M-Class and was joined later by Mercedes GL- and R-Class models. All now feature unibody architectures. Last year, the plant manufactured more than 185,000 vehicles with more than 3,000 employees.

Mercedes is promising to “significantly” increase output with the new C-Class and another new model in 2015, based on the Concept SUV Coupe, unveiled at the Beijing Auto Show earlier this year.

The production increase is part of a trend of rising light-vehicle output in North America. WardsAuto is forecasting LV production in the U.S. to continue at long-time highs for 2014 pegged at 16.7 million units, 3.7% above 2013. The 2014 forecast also is the highest North American total since 17.2 million in 2000.

The new C-Class, introduced at the North American International Auto Show in January, is Mercedes’ highest-volume model and is the first to be produced on four continents, the automaker says.

Production started in Bremen, Germany in February and East London, South Africa, in May. Assembly in Beijing is expected to begin shortly, the automaker says.

The C-Class has been Mercedes’ entry-level model for decades, but the redesigned version sports new features and a more luxurious interior as it tries to move upmarket now that the lower-priced CLA has been slotted below.

Mercedes has taken the unprecedented step of offering its most advanced semi-autonomous-driving technology on the C-Class, first featured in the automaker’s flagship S-Class model introduced last year.

Called “Stop & Go Pilot,” the system can drive the car briefly and make emergency stops if the driver is temporarily distracted. It also can autonomously follow a car ahead of it in slow traffic, including braking, accelerating and steering.

“This is the only car in its class that offers semi-autonomous features like the Stop & Go Pilot,” Daimler CEO Dieter Zetsche said at NAIAS.

The new C-Class also is more than 200 lbs. (91 kg) lighter than its predecessor and claimed to be the most aerodynamic in its class, with a coefficient of drag of 0.24. It is available with two dramatically different “faces” that offer consumers a more traditional Mercedes grille or a sportier front end resembling that on the CLA.