MERCEDES-Benz has confirmed it will inject almost $1 billion (600 million Euros) into its plant in East London, South Africa, which will be expanded and upgraded to produce the next-generation C-Class, including the new Mercedes-AMG high-performance range.
It will be the largest single vehicle investment by a foreign original equipment manufacturer (OEM) in South Africa.
The expansion will include the construction of new body and paint shops as well as an upgraded assembly shop and new logistics warehouses, which, combined, will boost the plant’s existing floor space by two thirds.
The body shop will have a higher capacity, while the assembly shop will get three new lines, which will use 700 tonnes of steel and new methods will make the new paint shop more energy efficient and more environment-friendly with overall energy consumption per vehicle reduced by 25 per cent.
The plant currently exports about 10,000 C-Class models a month.
Various initiatives will also make the factory more environmentally friendly.
There’s no official word on when the new C-Class will be introduced, but given that seven-year production cycles are the norm for Mercedes sedans, early 2021 is a good bet.
“With the investment of 600 million Euro, we are significantly expanding our plant in East London and equipping it for the future,” Mercedes divisional board member Markus Schefer said.
“The decision to have the new generation of the C-Class built in East London re-affirms the plant and Mercedes-Benz South Africa.”
BMW, Volkswagen, Toyota and Ford also invested substantial amounts in their plants at Pretoria, Port Elizabeth and in Durban in the past few years.
South Africa builds more than 600,000 passenger and light commercial vehicles a year.
It is not yet known if and how new US trade sanctions will affect the industry, though Mercedes exports to the US from East London are fairly small, given that the company has a production facility in Alabama.
Mercedes-Benz, which has been producing vehicles in South Africa for the past 60 years, is also the first car maker to build hybrid vehicles on the African continent.