Mercedes’ R10bn shot in arm for SA

Carmaker’s investment will lead to employment of hundreds more people in East Cape

President Cyril Ramaphosa meets a student at the Mercedes-Benz Learning Academy during a visit to East London where a major investment by the German company was announced yesterday
President Cyril Ramaphosa meets a student at the Mercedes-Benz Learning Academy during a visit to East London where a major investment by the German company was announced yesterday
Image: Elmond Jiyane/GCIS

German luxury car giant Mercedes-Benz has thrown South Africa an important foreign investment lifeline with a pledge to plough R10-billion into the country, President Cyril Ramaphosa announced in East London yesterday.

It will mean hundreds of new jobs for the Eastern Cape.

The Stuttgart-based marque will make its next generation C-Class sedan in East London, which will safeguard the existing jobs at the factory and contribute to growth in the region.

The plant, opened in 1958, employs 3 300 people and will be extended by two-thirds to accommodate new manufacturing capacity.

It produced 110 000 vehicles last year.

“The announcement by Mercedes-Benz Cars to inject R10-billion [ß600-million] into the South African economy signals the positive momentum we are making to realise the ambitious target of raising R1.2-trillion in new investment,” Ramaphosa said.

The investment will come as a relief for Ramaphosa, who came into office pledging an economic turnaround but has been buffeted by soaring living costs, a weak currency and dire growth and business confidence data.

Mercedes’ move “endorses South Africa as a favourable destination for investment”, Ramaphosa said.

Mercedes executive Markus Schäfer said: “The decision to have the new generation of the C-Class built in East London reaffirms the plant and Mercedes-Benz South Africa.

“The investment is also a sign of our commitment to South Africa and efforts to revive economic growth as well as the socioeconomic development of the East London region.”

The multibillion-rand investment, which will see the factory extended to create a smarter, greener, increasingly digitalised plant, was announced by Schäfer at the corporation’s auditorium in the East London plant.

The dignitaries present, led by Ramaphosa, included Finance Minister Nhlanhla Nene, Trade and Industry Minister Rob Davies and Small Business Development Minister Lindiwe Zulu.

Schäfer said this year was a special one for the plant as it celebrated 60 years since it manufactured the first C-Class sedan in East London.

“With the investment of ß600-million we are significantly expanding our plant in East London and equipping it for the future.” He said the plant was one of only four in the world producing the C-Class range and was ranked among the top five plants in the world for its quality production and 99.9% employee attendance record.

Mercedes-Benz South Africa chief executive and executive director of production, Andreas Engling, praised the employees at the plant for its excellent reputation.

“With initiatives like the Mercedes-Benz Learning Academy, we are promoting the overall industrial and commercial development of the Eastern Cape,” he said.

“The solid manufacturing heritage of the East London plant would not have been possible without the dedication and passion of our employees and robust labour relations that continue to put us in a competitive position in terms of quality, delivery and cost.

“The investment will be used for expansion of the plant.

“The new body shop is designed for higher capacities and features more than 500 ‘Internet of Things’ – ready robots laying the foundation for Industry 4.0 readiness.

“Seven hundred tons of steel will be installed for the addition of three lines in the assembly shop. The new paint shop will be more energy-efficient and more environmentally friendly.”

Engling said the overall energy consumption per produced vehicle would be cut by 25%, in line with the drive to attain greener production.

Ramaphosa, who visited the Mercedes-Benz Learner Academy with the other government officials, said: “Mercedes-Benz has for the past 60 years been producing cars that leave this city for the rest of the world.

“However, it is not just about the cars, but the lives it has impacted by building cars here and boosting the economy while upskilling our people,” he said.

“The R10-billion will impact many more lives as it will create jobs in line with our jobcreation campaign as part of our economic policy to tackle unemployment and improve the quality of life of our people.

“This will increase export capacity and boost jobs and develop more skills while nurturing talent.

“This company is taking giant steps with learnerships and apprenticeships and educating employees within the plant.”

Ramaphosa appealed to the company to source local procurement and localise suppliers to create jobs for the previously disadvantaged.

“Mercedes-Benz has entered a new dawn with a great deal of confidence and we want to see more giant companies following suit,” he said.