DaimlerChrysler on Thursday said it was investing about $US600 million in expanding its Mercedes-Benz M-class SUV plant in Tuscaloosa, Alabama, according to Reuters.

As a result, the workforce would be doubled to about 4,000 employees and annual production capacity at the 10-year old factory also will be doubled to about 160,000 vehicles, the company said in a statement cited by the news agency.

The news comes just days after DaimlerChrysler postponed plans to build a plant in Georgia to build German-designed Mercedes vans.

Reuters said the Alabama plant, which currently builds just the M-class, will in future produce the more luxurious Grand Sports Tourer - which starts production in early 2005 - as well as the M-Class successor.

"In Tuscaloosa we have impressively shown that we can produce a new production series with a new workforce in a new factory and we have also demonstrated that it is possible to have vehicles successfully 'Made by Mercedes' outside of Germany," Mercedes chief Juergen Hubbert said in the statement, according to Reuters.

Since its launch in 1997, Mercedes has sold more than 500,000 M-class vehicles in 135 countries around the world, the report noted.

In addition to an initial investment of about $300 million, DaimlerChrysler spent about $80 million in 1998 and 1999, expanding capacity to about 80,000 units a year, Reuters added, noting that, from 1999 to 2002, the M-Class was also built in Austria by Magna Steyr, the European vehicle assembly unit of Canadian automotive parts maker Magna International.