Mercedes-Benz’s SAR2.7bn spend at its East London C-class plant will introduce new technologies into South Africa.
The plant was chosen as a preferred manufacturer — along with three other facilities, in Germany, China and the US — of the premium C-Class vehicles, Business Day noted.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The plant, which saw record production last year, will be adapted to make about 60,000 units of the next-generation model each year. It will localise more than 40% of the components for the new vehicles, and is training 800 new employees.
“We really have a strong commitment to SA with the highest export ratio (of plants) in the world,” Martin Zimmermann, president and CEO of MBSA, said.
The plant has won consecutive top annual quality awards from 2006 to date, both from JD Power and also from Synovate, a unit of Paris-based global market research group Ipsos.
In 2011, it received the JD Power gold award as the highest-ranked manufacturing plant supplying the US from Europe and Africa.
Last year it received the JD Power silver award for the same category. The plant also assembles about 5,000 Mercedes-Benz, Freightliner and Fuso trucks each year, plus Mercedes-Benz bus chassis.
The latest SAR2.7bn spend follows numerous other investments worth over SAR5bn in SA over the past 10 years. This came after MBSA offered parent Daimler a business and production plan for the C-Class that was globally competitive.
The investment will introduce new technologies into the country, providing for extensive training and skills development. The National Union of Metalworkers in East London has said the city depends on Mercedes-Benz for about 80% of manufacturing.
SA has updated its Industrial Policy Action Plan to include the Automotive Investment Scheme (AIS) and revamped Automotive Production Development Programme. The government wants about 1.2m vehicles produced in SA each year by 2020.
The AIS is an incentive designed to grow and develop the motor sector through investment in new and replacement models and components. It is intended to increase plant production volumes, while strengthening the automotive value chain, Business Day said.
Vehicle exports from SA to the rest of Africa grew almost 20% last year, offsetting a decline in sales to the European Union and US markets.
MBSA saw revenue of R33.8bn last year, marginally down from 2011. It said this the positive outlook of SA’s vehicle market, contrary to the indications of slower growth in the economy and rising inflationary pressures.
