http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.15Change: 0.05
R/$ = 11.58Change: -0.02
Au 1195.87 $/ozChange: -1.05
Pt 1197.50 $/ozChange: 0.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Mar 26, 2008

Mercedes-Benz remains upbeat despite car sales slowing

Back
 
London|Africa|Flow|Ford Motor Company|Mitsubishi|Motors|Nissan|PROJECT|Project Management|Resources|Roads|System|Systems|Volkswagen South Africa|Africa|Europe|South America|Germany|South Africa|United States|East London Facility|Uitenhage Plant|Automotive|Energy|Flow|Manufacturing|Motors|Passenger Car Sales|Passenger Car Side|Sports Car|Systems|Transport|Hansgeorg Niefer|Infrastructure|Motors|Power|C-Class|M-class|Mitsubishi Lancer|Motors|Eastern Europe
|Africa|Flow|Motors|PROJECT|Project Management|Resources|Roads|System|Systems||Africa||||Automotive|Energy|Flow|Manufacturing|Motors|Systems|Transport|Infrastructure|Motors|Power|Motors|
london|africa-company|flow-company|ford-motor-company|mitsubishi|motors-company|nissan|project|project-management|resources|roads|system|systems-company|volkswagen-south-africa|africa|europe|south-america|germany|south-africa|united-states|east-london-facility|uitenhage-plant|automotive|energy|flow-industry-term|manufacturing|motors-industry-term|passenger-car-sales|passenger-car-side|sports-car|systems|transport-industry-term|hansgeorg-niefer|infrastructure|motors-person|power|cclass|mclass|mitsubishi-lancer|motors|eastern-europe
© Reuse this



The Mercedes-Benz South Africa (MBSA) group has no intention of slowing down production of its top-seller this year, despite the challenges posed by the sharp downward turn in passenger car sales, and other factors such as inflation, crime and political instability.

Chairperson Dr Hansgeorg Niefer told the media at the group's 2007 business results presentation, that it was going to take it up a gear in terms of production volumes of the C-class coming out of its East London facility.

"I am convinced we will produce the highest number of C-classes ever in 2008 - so a very positive outlook for us," Niefer declared.

It is projected that this year MBSA would manufacture close to 70 000 units in total, over 50 000 of which would be the C-class model.

MBSA's upbeat outlook contrasts with certain other automotive manufacturers that were reportedly slowing production at some assembly plants because of the drop in new vehicle sales.

Local daily Business Report said on Tuesday that Volkswagen South Africa was stopping production at its Uitenhage plant for eight days. Nissan was also expected to close for three days over the next two to three months, while the Ford Motor Company of South Africa acknowledged the possibility of having to adopt the same action, the daily reported.

Although the C-class model, which is exported to the US, and constitutes the largest percentage of MBSA manufacturing volumes, would be the focus for the coming year, it would not be the only star of the show.

"This year will be the busiest year on the Mercedes-Benz passenger car side," Niefer commented, adding that it would see the launch of, among others, the new Smart car, the C63 AMG, the family vehicle C-Class, the face-lifted SL sports car, and the new A, E and M-class models.

The new model Mitsubishi Lancer would also be introduced, and was expected to appeal to the black emerging market - a demographic that has been singled out as presenting significant opportunities for MBSA going forward, as its numbers and spending power grew.

Another potential area for growth in the near future was the implementation of the country's integrated transport plans, particularly the bus rapid transit (BRT) system. Niefer said that MBSA would be able to make a "big contribution" to the system, adding that it was busy putting together a project management team that included some employees from Mercedes-Benz Germany who had been involved in implementing BRT systems in South America.


Continued support for the automotive sector vital


Niefer stated that there were certain factors critical to maintaining continued growth and capitalising on the opportunities presented, topping the list was the Motor Industry Development Programme (MIDP).

He commented that it was "not good news" to note that the investment in the automotive industry was down by 50%, compared with previous the year, to R3,1-billion in capital expenditure.

Niefer explained that vehicle manufacturers in South Africa were at a disadvantage, firstly, as they had to import parts into the country, produce the vehicle and then export it at a cost of between €2 000 and €3 000 a vehicle - which they received no compensation for - and secondly, because of their distance from other markets compared with competitors.

Competition was mainly out of Eastern Europe as the manufacturers have the same salary and wage base as MBSA, but their main advantage is that they are right on the doorstep of the biggest market - Europe.

"Somehow we have to compensate this logistical disadvantage otherwise we will never get competitive," Niefer noted.

MBSA remains reliant on its export businesses, but requires further support, not only through the MIDP. He added that regional support was also crucial and the company had been engaging the Department of Trade and Industry in this regard.

Continued growth was also dependent on a secure supply of energy and resources, and aside from the importance of a stable power supply particularly for the East London production facilities, the issue of fuel quality was highlighted.

Niefer acknowledged that, while local fuel quality had improved a lot, it was still far from that of first world countries, and Mercedes-Benz could only introduce new technology, reduce fuel consumption and CO2 emissions if local fuel reached the same quality levels as that of Germany and the US.

He outlined the need for positive business sentiment, and a focus on roads and infrastructure, tackling the problems of potholes and congestion.

Going against the flow

Looking back, despite the "tough" year experienced in the automotive sector in 2007 owing to higher interest rates and fuel prices, and the introduction of e-Natis and the National Credit Act, MBSA seemed to have "bucked the trend", increasing its revenue by 13,5% to R37-billion.

Turnover of the group's vehicle finance business improved 31,4%, and Mitsubishi Motors contribution to overall revenue was up by 3,8%.

In the local market, Mercedes-Benz car sales reached a record high growth rate of 6,3% year-on-year, recording a market share of 7,5%, compared with 2006's 6,4%.

In terms of the Daimler global, South Africa was positioned at number seven for passenger car sales and at number eight for truck sales.

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Automotive News
Truck hijackings in South Africa are rising rapidly, and are up by around 10% year to date over 2013 statistics, says Road Freight Association (RFA) technical and operations manager Gavin Kelly. This adds up to a 5.1% increase for 2013/14, to 991 incidents, compared...
South Africa remains an important manufacturing and export platform for Ford Motor Company, says executive chairperson Bill Ford. However, he adds that other countries on the continent are “becoming interesting”, and that the US carmaker is casting its net wider for...
Truck hijackings in South Africa are rising rapidly, and are up by around 10% year to date over 2013 statistics, says Road Freight Association (RFA) technical and operations manager Gavin Kelly. This adds up to a 5.1% increase for 2013/2014, to 991 incidents,...
More
 
 
Latest News
China appears to have been routinely underestimating output from its sprawling steel sector, with official figures for last year alone 40-million tonnes below a key industry estimate - an amount equivalent to Germany's entire annual production. Beijing has vowed to...
Lumwana, Zambia
Canada’s Barrick Gold Corp will suspend operations at its Lumwana copper mine, in Zambia’s Northwestern province, after the country enacted legislation that raised the royalty rate on openpit mining operations from 6% to 20%. TSX- and NYSE-listed Barrick, the world’s...
The Labour Court in Johannesburg has set aside the 2011-2014 metal sector wage agreement, the National Employers' Association of SA (Neasa) said on Thursday. The 2011-2014 wage deal was the result of an agreement between the Steel and Engineering Industries...
More
 
 
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
 
 
 
 
 
This Week's Magazine
South Africa remains an important manufacturing and export platform for Ford Motor Company, says executive chairperson Bill Ford. However, he adds that other countries on the continent are “becoming interesting”, and that the US carmaker is casting its net wider for...
TO BE PHASED INTO SERVICE The first MeerKAT dish, with another 63 to come
Germany’s Max-Planck-Society (MPG) and the Max-Planck-Institute for Radio Astronomy (MPlfR) are investing €11-million (about R150-million) into South Africa’s MeerKAT radio telescope array programme. The money will be used to design, build and install S-band radio...
Infrastructure spend in sub-Saharan Africa will grow from $70-billion in 2013 to $180-billion by 2025, says PwC capital projects and infrastructure Africa leader Jonathan Cawood. This is one of the findings of PwC’s Capital Projects & Infrastructure report on East...
Private-owned defence and aerospace manufacturer Paramount Group and the Ichikowitz Family Foundation unveiled its Anti-Poaching Skills and K9 Training Academy in Magaliesburg last month.
MATT BARKER Wireless networks should enable users to engage and must provide relevant information to them based on their activity and location
The inclusion of Bluetooth to provide sub-three meter accuracy and heightened functionality for users is one of the ways to change existing wireless networks into engagement networks. An engagement network differs from common wireless networks in that it enables the...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks