MBSA said the expansion of the plant was a sign of the carmaker’s commitment to South Africa and efforts to revive economic growth.
Divisional board member Markus Schäfer said that the expansion would involve the construction of a new paint shop and a new body shop, an upgrade of the assembly shop and new logistic warehouses.
“With the investment of 600m, we are significantly expanding our plant in East London and equipping it for the future,” 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 socio-economic development of the East London region.”
The expansion is the first major investment since President Cyril Ramaphosa announced his drive to lure $100bn (R1.35trillion) worth of investments to South Africa.
Ramaphosa attended the launch accompanied by Finance Minister Nhlanhla Nene and his Trade and Industry counterpart, Rob Davies.
He welcomed the investment by Mercedes-Benz Cars, saying a central priority for the government this year had been to encourage significant new investment in the economy.
Ramaphosa said this was necessary to realise economic growth, employment and reduce inequality.
He said it was an endorsement of the government’s determination to work with all social partners to seize the opportunities that are opening up for greater investment and faster growth.
“A central priority for the government this year has been to encourage significant new investment in our economy, necessary to realise economic growth, employment and reduce inequality,” Ramaphosa said.
“The announcement by Mercedes-Benz Cars to inject R10bn in the South African economy signals the positive momentum we are making to realise the ambitious target of raising R1.35trln in new investment.”
MBSA said the expansion would add to existing buildings for the plant’s passenger vehicle production. The new workshops would incorporate environmentally friendly and state-of-the-art technologies.
SA Institute of Race Relations chief economist Ian Cruickshanks said the investment by the carmaker was substantial. Cruickshanks said it would also benefit the country’s battered economy.
Efficient Group chief economist Dawie Roodt said the investment was as a result of government subsidies that carmakers were getting in South Africa.
- BUSINESS REPORT