Mercedes-Benz planning production increase in South Africa image

Although rival BMW announced plans to halt development in the country, Mercedes-Benz said it would go as planned with a 3 billion rand ($302 million) investment in South Africa, aiming to raise local production output to 100,000 units a year.

During an interview at the Johannesburg Motor Show, the carmaker’s South Africa Chief Executive Officer Martin Zimmermann said the prospects for further growth in Africa’s largest economy is still considered “very positive,” and the company aims to bring new technology and a third shift to its local plant, which makes around 60,000 cars annually at the moment.

The company’s decision to further commit to South Africa comes less than two weeks after BMW, the world’s largest maker of luxury vehicles, announced it would halt expansion plans in South Africa after the succession of labor strikes made it lose production of 13,000 vehicles.

The lost production from the walk out that closed plants in August and September would be recovered by Mercedes in six to seven weeks, according to Zimmermann. “We have quite a significant order book,” he said.

South African new car sales slid for a second month in September and exports went down by 75 % as strikes hit carmakers’ operations. Workers at seven prducers operating in South Africa, including BMW and Ford called a strike, resulting in an estimated 20 billion rand ($2 billion) loss to the companies.

Via Bloomberg