BREAKING NEWS

Mercedes-Benz Cars invests $699 Mn in expansion of East London plant

  • Investment was announced during a visit of His Excellency, Cyril Ramaphosa, President of South Africa, alongside other distinguished South African and German guests from the spheres of politics and business.
  • Markus Schäfer, Member of the Divisional Board of Mercedes-Benz Cars, Production and Supply Chain: “With the investment of 600 Million Euro we are significantly expanding our plant in East London and equipping it for the future. The decision to have the new generation of the C-Class built in East London re-affirms 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 socio-economic development of the East London region.”
  • The President of South Africa, Cyril Ramaphosa, stated: “A central priority for government this year has been to encourage significant new investment in our economy, necessary to realise economic growth, employment and reduce inequality. The announcement by Mercedes-Benz Cars to inject R10 billion in the South African economy signals to the positive momentum we are making to realise the ambitious target of raising R1.2 trillion in new investment. This investment by Mercedes-Benz Cars endorses South Africa as a favourable destination for investment; and correspondingly, demonstrates our determination to work with all social partners to seize the opportunities that are opening up for greater investment and faster growth.”

Mercedes-Benz Cars will also produce the next generation of the C-Class in East London (South Africa) and expands the plant with an investment of 600 Million Euro. This includes the construction of a new paint shop and a new body shop, an upgrade of the assembly shop and new logistic warehouses. Overall the new buildings comprise an area of approximately 100.000 sqm, this reflects an addition of two thirds of the already existing buildings for the passenger vehicle production. The new workshops will incorporate environmental friendly and state of the art technologies.

“With the investment of 600 Million Euro we are significantly expanding our plant in East London and equipping it for the future. The decision to have the new generation of the C-Class built in East London re-affirms 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 socio-economic development of the East London region,” stated Markus Schäfer, Member of the Divisional Board of Mercedes-Benz Cars, Production and Supply Chain, during the visit of His Excellency, Cyril Ramaphosa, President of South Africa to Mercedes-Benz plant in East London.

Commenting on the investment by Mercedes-Benz Cars, President Cyril Ramaphosa stated: “A central priority for government this year has been to encourage significant new investment in our economy, necessary to realise economic growth, employment and reduce inequality. The announcement by Mercedes-Benz Cars to inject R10 billion in the South African economy signals to the positive momentum we are making to realise the ambitious target of raising R1.2 trillion in new investment. This investment by Mercedes-Benz Cars endorses South Africa as a favourable destination for investment; and correspondingly, demonstrates our determination to work with all social partners to seize the opportunities that are opening up for greater investment and faster growth.”

Markus Schäfer and Andreas Engling, Mercedes-Benz South Africa CEO and Executive Director Production, welcomed distinguished guests from South African and German spheres of politics and business, to the official visit of the President: Dr. Rob Davies, Minister of the Department of Trade and Industry of South Africa, Nhlanhla Nene, Minister of Finance of South Africa, Phumulo Masualle, Premier of the Eastern Cape, Oscar Mabuyane, Member of the Executive Council for Economic Development, Xola Phakathi, Executive Mayor Buffalo City Metropolitan Municipality and Andreas Kellermann, Vice President Head of Production S-, E- and C-Class.

The year 2018 marks the sixtieth anniversary of Mercedes-Benz passenger vehicle production at the East London plant. Over the years, the plant has evolved as a significant contributor to South Africa’s trade balance and an economic multiplier for East London. Furthermore, the plant actively commits to the community of East London and the Eastern Cape. One example is the Mercedes-Benz Learning Academy (MBLA) - a flagship and sustainable Public Private Partnership in cooperation with the National Treasury and the Jobs Fund, demonstrates the commitment of Mercedes-Benz South Africa to empowerment and youth development in the automotive manufacturing sector. Since 2004, MBLA has offered world-class quality training and transferrable skills, qualifying hundreds of skilled artisans in the Eastern Cape.

“With initiatives like the Mercedes-Benz Learning Academy, we are promoting the overall industrial and commercial development of the Eastern Cape. The solid manufacturing heritage of the East London plant would have not 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,” said Andreas Engling.

The investment of 600 million Euro will be used for a wide expansion of the plant. Many different parts of the plant are affected by the expansion, both Green- and Brownfield. 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. 700 tons of steel will be installed for the addition of three lines in the assembly shop, this expansion will take place in the current building. Utilizing new methods, the new paint shop will be more energy efficient and more environmental friendly. Overall, the energy consumption per produced vehicle will be further reduced with 25% in the East London plant. This is in line with the plants initiative for a green production. Other examples include on-site battery storage container, rain water harvesting on rooftops, water storage of 1 Million Litres and the creation of green corridors.

About Mercedes-Benz Cars Operations
Mercedes-Benz Cars Operations is responsible for passenger car production at over 30 locations around the world. Three of them are currently being established. Within a flexible and efficient production network with around 78,000 employees it includes the central functions of production planning, TECFACTORY, logistics, and quality. Mercedes-Benz Cars produced more than 2.4 million Mercedes-Benz and smart passenger cars last year, marking the seventh record in a row. The network is based on the product architectures of front-wheel drive (compact cars) and rear-wheel drive (for example the S-Class, E-Class, and C-Class) as well as the SUV and sports car architectures. In addition, there is a powertrain production compound (engines, transmissions, axles and components). Each of these production compounds is grouped around a lead plant that serves as a centre of competence for the ramp-up of new products, technology and quality assurance. Mercedes-Benz Cars is ready for the electro mobility: Around the globe electro hubs are built for the production of electric vehicles and batteries. The focus of day-to-day work is on the continuous improvement and refinement of state-of-the-art production methods, which allow future high-tech vehicles to be produced in a way that is efficient, flexible and environmentally friendly, according to the typical Mercedes-Benz quality standards. All of this revolves around the employees and their expertise, whose work is systematically supported by ergonomic workplace design and intelligent automation. In addition to its own production plants, Mercedes-Benz is increasingly leveraging partnerships and utilizing capacities at contract manufacturers as part of its growth strategy.

About Mercedes-Benz South Africa and East London plant 
The East London plant started production of Mercedes-Benz passenger cars in 1958. Today the C-Class sedan for the export to right-hand and left-hand markets are produced at the premises. In 2017 the production volume reached 110,000 vehicles. The plant also started the production of Mercedes-Benz trucks in 1962. Today trucks and buses of the Mercedes-Benz brand as well as trucks of the Fuso brand are produced. In total the plant employs 3,300 people, the majority work at the passenger vehicle production. The East London plant is an important part of the C-Class global production network. Next to the South African plant and the lead plant in Bremen (Germany), the network includes the Mercedes-Benz plants in Tuscaloosa (USA) and at BBAC (China). 

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