Mercedes-Benz to invest further in SA

17 October 2013

German car maker Mercedez-Benz announced its intention to expand its production in South Africa on Wednesday, while Ford Motor Company reaffirmed the US vehicle maker’s commitment to the country.

Both developments come ahead of a meeting between vehicle manufacturers and Trade and Industry Minister Rob Davies, scheduled for Thursday, aimed at restoring confidence to the local industry following a series of lengthy strikes.

In an interview with news agency Bloomberg on Wednesday, coinciding with the opening of the Johannesburg International Motor Show, Mercedez-Benz South Africa CEO Martin Zimmermann said the company would push ahead with its plan to invest US$302-million (R3-billion) in expanding its production at its manufacturing plant in East London.

Zimmerman told Bloomberg that the company would introduce new technology and a third shift in order to boost production from the current 60 000 units to 100 000 units a year.

The plant produces the Mercedes-Benz W204 C-Class for both the local and US markets, and is currently preparing for the introduction of the next-generation C-Class in 2014. The East London plant will be one of just four in the world to manufacture the popular luxury sedan.

Also on Wednesday, Ford Motor Company global president and CEO Alan Mulally, in an interview with Business Day on the opening day of the Johannesburg International Motor Show, said the company had no plans to cut back on its operations in South Africa.

Mulally told Business Day that Ford’s assembly plant in Silverton, Pretoria remained key to its global operations, and “suggested that its importance could grow, following a decision to create a new Ford division for the Middle East and Africa.

The company’s Silverton plant, along with its engine plant at Struandale outside Port Elizabeth, produces Ford Ranger pickup trucks for export to 148 countries, mainly in Africa and Europe.

Mulally said the group had no plans to start manufacturing elsewhere in Africa.

Minister Davies’ scheduled meeting with the industry follows a meeting last week with BMW South Africa MD Bodo Donauer during which BMW said it remained “100% committed” to the ongoing production of the BMW 3 Series Sedan at its plant in Rosslyn outside Pretoria.

“However, Mr Donauer stated that it was a matter of fact that lengthy strike action in the automotive sector and the consequent non-supply of 15.8% of annual BMW 3 Series volume, most of which was destined for major export markets, had cost BMW South Africa an opportunity to compete for a potential second model,” the Department of Trade and Industry (DTI) said in a statement.

“In an open discussion, the parties discussed how they could work together to create a sustainable environment for BMW South Africa to compete for similar additional investments in the future, should the opportunities arise.”

Davies told BMW that the government remained committed to supporting the development of motor manufacturing in South Africa, and would be holding further talks with the industry on how to foster a climate that ensured its continuing growth.

SAinfo reporter