R/€ = 14.94Change: 0.05
R/$ = 14.04Change: 0.05
Au 1075.40 $/ozChange: -0.66
Pt 842.50 $/ozChange: 0.00
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?

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 Letters About Us
RSS Feed
Article   Comments   Other News   Research   Magazine  
Mar 26, 2008

Mercedes-Benz remains upbeat despite car sales slowing

Africa|Export|Flow|Motors|PROJECT|Project Management|Resources|Roads|System|Systems|Technology|transport|Africa|Automotive|Energy|Flow|Manufacturing|Motors|Systems|Infrastructure|Motors|Power|Motors
Africa|Export|Flow|Motors|PROJECT|Project Management|Resources|Roads|System|Systems|Technology|transport|Africa|Automotive|Energy|Flow|Manufacturing|Motors|Systems|Infrastructure|Motors|Power|Motors
© 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
Creamer Media Senior Researcher and Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
Other Transport & Logistics News
Max Hussman inside the Falcon 7X cabin
Business aviation company BSS Africa, part of the Elegance Group, has, in cooperation with renowned French group Dassault Aviation, brought a Dassault Falcon 7X executive jet to South Africa as part of its marketing strategy. “Our aim with this introduction to the...
The Baleno
Suzuki Auto South Africa (SA) will introduce a new commercial vehicle to the local market in 2016. The introduction of the four-door Baleno hatchback is also on the cards, with no launch date confirmed yet.   Suzuki Auto SA MD Yukio Sato says the commercial vehicle...
South African motoring fans will have to permanently bid farewell to the Johannesburg International Motor Show. Originally scheduled to take place in October this year, the biennial event was cancelled in May, owing to rising costs.
Article contains comments
Article contains comments
Latest News
Maurice Radebe
Updated 7 hours ago Imported liquefied natural gas (LNG) is expected to initiate the greater use of gas in South Africa’s currently coal-dominated electricity generation. Anticipated is the establishment of infrastructure at South African ports, such as Saldanha Bay, Coega or Richards...
Updated 7 hours ago As South Africa battles water restrictions precipitated by the El Niño phenomenon, aged infrastructure, above-average temperatures, below-average rainfall and climate change, industry stakeholders have called for a collaborative water stewardship approach that will...
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 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 infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
Additive manufacturing, better known as 3D printing, has the potential to completely change the relationships between individual consumers, professional designers and manufacturers. So argued Loughborough University Reader in Computer Aided Product Design Dr Ian...
Airbus Defence and Space: Military Aircraft has highlighted that its A330 Multirole Tanker Transport (MRTT) has significant commonalities with the Airbus A330-200 commercial airliner, upon which it is based. The South African Air Force (SAAF) once operated a fleet of...
Financial services provider Nedbank launched the second edition of its Carbon Footprinting Guide earlier this month, which is aimed at demystifying carbon footprint approaches and help readers grasp the main concepts of carbon measuring, monitoring, reporting and...
This year marks the thirtieth anniversary of Caterpillar’s first backhoe loader. This also coincides with the worldwide release of its latest-generation F2 series backhoe loader, which was launched at supply chain services company Barloworld Logistics’ Big Dig Day in...
BARRY DWOLATZKY The CPD programme provides advanced skills required locally, and provides a stepping stone to Wits University’s Master of Engineering degree in software engineering
A shortage of software engineers is leading to fewer information technology (IT) projects in private and public sector organisations. This also places a dampener on the economy, as IT is an integral part of business and civil service, says University of Witwatersrand...
Alert Close
Embed Code Close
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
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96