Mercedes-Benz considers shifting plant capacity to South Africa


MBSA installing hybrid vehicle production capability in its East London plant

Mercedes-Benz South Africa (MBSA) may shift production of some plug-in hybrid models from parent company Daimler's plants to its South African plant in West Bank, East London, reports the Mercury. The news report cited Arno van der Merwe, MBSA's chief executive and vice-president for manufacturing, who said this could give the company's hybrid vehicles "a more meaningful part of its production at its East London plant". Van der Merwe added that MBSA was also installing hybrid vehicle production capability in its East London plant to enable it to take advantage of Daimler's flexible production network. "In terms of product, we are on the offensive and will grow our product range as we move forward and have plans to put those vehicles into East London. We don't know yet what the investment will be, but it's a good business case for us to do that," said Van der Merwe.

Significance: According to IHS Automotive light-vehicle sales data, Mercedes-Benz currently manufactures the C-Class at the East London plant, with output reaching 102,230 units in 2015. This figure is forecast to reach 104,461 units in 2016. Daimler has a key advantage with this South African plant due to its close proximity to the harbour, which makes exports easier. Therefore, this facility will not be overwhelmed with vehicle stock, and will have the ability to ship vehicles out of the warehouse directly to the harbour when needed. On the other hand, there have been several rounds of industrial action and strikes in South Africa's automotive industry in recent months, including MBSA when its major supplier Lear Corporation threatened production at the OEM's East London plant

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