High hopes for C-Class after R5bn investment

A STAR IS BORN: The assembly line in East London of MBSA's new C-Class
A STAR IS BORN: The assembly line in East London of MBSA’s new C-Class

THE biggest investment in the automotive sector in the past five years has been made in the Eastern Cape. The investment of R5.4-billion into the production of the new C-Class at Mercedes-Benz South Africa (MBSA) in East London was the biggest investment made during his administration as trade and industry minister, Rob Davies said.

Speaking at the start of production of the new model at the East London manufacturing plant yesterday, Davies said it was the single largest investment made by an SA vehicle manufacturer under the automotive investment scheme.

Since 2009 the total investment by the automotive sector had been R22.5-billion, the bulk of which was made by the vehicle manufacturers, and in total 9756 jobs had been created over the past five years, he said.

The automotive sector had led to the recovery of some of the jobs lost during the recession and the vehicle sector contributed between 6% and 7% of South Africa’s gross domestic product.

About 85% of the C-Class models manufactured in East London will be exported, while the model will be available for the local market from the end of the month.

More than 400 direct jobs were created at MBSA with the new C-Class while at least 200 more were created at the 10 new component suppliers, six of which are based in the East London industrial development zone.

Although MBSA chief executive and vice-president for manufacturing Arno van der Merwe did not want to say what markets the C-Class would serve, MBSA would significantly increase the number of export countries and the volumes produced.

South Africa’s automotive sector is relying heavily on the contribution of MBSA with the export of its new C-Class to boost declining vehicle sales.

The new vehicle sales for last month show a decline of more than 10% compared with the same month last year, and exports dropped by 32.6%.

Divisional board member for Mercedes-Benz cars, production and supply chain management Markus Schäfer called the new C-Class a triple win for Mercedes-Benz, MBSA and the East London plant.

He said it was the biggest and most complex launch in the company’s history as the model would be manufactured at plants on four different continents. Production started in Germany in February, and will be launched in the US and China. – Cindy Preller

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