JOHANNESBURG - Mercedes-Benz South Africa (Pty) Ltd. (MBSA), a unit of Daimler AG, has received confirmation of the production of the next-generation Mercedes-Benz C-Class, following extensive planning and preparation to present the East London plant as an optimal manufacturing location within the global production network. This R2-billion investment is expected to further enhance the positive economic impact of Mercedes-Benz’ activities in South Africa, both directly through its own operations as well as indirectly, i.e. on the supplier level. The investment also provides for extensive skills development and training locally and in Germany, as well as for new plant and equipment, and the introduction of some of the very latest manufacturing technology.
Confirming its commitment to the South African operation, Daimler AG, one of the biggest producers of premium cars and the world's biggest manufacturer of commercial vehicles, announced that it would be investing a further R2-billion into the South African plant in preparation for production of the next-generation Mercedes-Benz C-Class, which will be introduced to global markets in 2014.
Dr. Wolfgang Bernhard, Daimler AG Board of Management member, Manufacturing and Procurement Mercedes-Benz Cars and Mercedes-Benz Vans, said: “Daimler AG is delighted to include South Africa among the four manufacturing locations around the world to build the next-generation C-Class – the most popular model within the Mercedes-Benz passenger cars range. The Mercedes-Benz plant in East London has been recognised repeatedly for its excellent production quality by J.D. Power and Associates and is one of the best manufacturing plants in the industry. This success is not least due to the great efforts of the East London plant’s team and its stringent application of the Mercedes-Benz production system with its robust processes and rigorous quality standards.“
Dr. Bernhard went on to say, “MBSA has also managed to provide us with a business and production plan that is competitive globally. Hence, our decision to also build the next-generation of our C-Class at the East London plant is a logical step. This new, additional investment follows numerous significant investments, totalling over R5-billion that Daimler AG has made in South Africa over the past 10 years.”
The three other Mercedes-Benz plants selected to produce the next-generation C-Class are located in Germany, China and the USA. MBSA’s future export programme will include building both left- and right-hand drive C-Class models for export to markets in Africa and the Asia Pacific region.
Delighted with the announcement and the ‘vote of confidence’ in the local operations, Dr. Hansgeorg Niefer, CEO of MBSA, said,” We have had immense success in South Africa with the C-Class, and we have exported to left-hand drive markets since 1998 and to right-hand drive markets since 2000. Today is very special, as we can now go full steam ahead with our preparations to build the next generation of this successful Mercedes-Benz model. Just recently we exported the 100 000th C-Class built in East London. In the first quarter of next year we should reach the half-a-million mark of C-Class vehicles produced locally since 1994, which marked the model’s start of production in South Africa.”
“The Mercedes-Benz plant in East London follows global processes and standards outlined in the Mercedes-Benz production system for all Mercedes-Benz passenger cars plants. Our employees and their unwavering dedication and passion for the product, their commitment to quality work and their loyalty to the company contribute tremendously to its key strengths,” said Dr. Niefer proudly.
“We will bring more than a dozen new technologies to South Africa in the car and production processes,” said Dr. Niefer. “MBSA will localise more than 40% of the components for this new vehicle. We expect to see more investors and new suppliers, all with the latest technologies coming to the country. These developments will certainly strengthen the entire automotive value chain.
“With the pledged support of the South African Government, MBSA plans to make optimum use of the South African regulatory environment and leverage the advantages presented through the Government’s Industrial Policy Action Programme (IPAP), as well as the Automotive Investment Scheme (AIS) and the future Automotive Production Development Programme (APDP). The plant has the capacity to add a third shift, which means it will be able to run 24 hours per working day depending on market demand,” explained Dr. Niefer.
MBSA has a proven track record for the finest quality, and fast and flexible ramp-up ability. The adaptations for the next-generation C-Class in the plant will take place in a phased manner along with the continued production of the highly successful current C-Class right up to run-out. This will require a significant expansion of the technical capacity of the plant to 65,000 units. The next-generation C-Class ramp-up will then begin in 2014.
“We have a flexibility agreement with the union which will help to achieve high output and maintain stringent quality standards at the same time. This working arrangement with NUMSA and our shop stewards is testimony to the high level of maturity in our relationship with the union,” explained Dr. Niefer.
The headquarters of MBSA are located in Zwartkop/Pretoria. At the Mercedes-Benz East London plant, more than 2,400 employees produced more than 41,000 Mercedes-Benz C-Class sedans in 2009. Mercedes-Benz has been active in South Africa since 1954 and acquired the majority of the East London plant in 1984.