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Ten new components firms set up in wake of R5.4bn C-Class investment

6th June 2014

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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The first new C-Class has rolled off the production line at the Mercedes-Benz South Africa (MBSA) East London plant, in the Eastern Cape.

Exports to around 80 markets are scheduled to start at the end of the second quarter.

Between 80% and 85% of production will be exported.

Production of the new vehicle, in left-hand- and right-hand-drive derivatives, has seen capacity at the plant increase from roughly 50 000 C-Class units a year to around 100 000 units a year.

Investment by MBSA and its Daimler parent company to produce the new C-Class amounted to R5.4-billion, says Trade and Industry Minister Dr Rob Davies.

Components manufacturers have invested an additional R2-billion.

Ten new multinational components suppliers have set up shop in South Africa to enable production of the new C-Class, which started competing in the South African premium-car market from the end of May.

Around 800 new jobs have been created in the MBSA value chain.

MBSA CEO and manufacturing VP Arno van der Merwe notes that the local arm of the German manufacturer will move to a third assembly shift “in the next few weeks”.

Mercedes-Benz Cars divisional board member Markus Shäfer says MBSA has cut the time to produce a C-Class in East London by 30% from 2008 to 2013.

He also highlights the many accolades the plant won globally for the high- quality vehicles it produces.

“The opportunity to build the C-Class was clearly earned.”

The midsize luxury C-Class is Mercedes-Benz’s highest volume seller globally.

There are four plants that produce the new C-Class, with one operation each in the US, China, South Africa and Germany.

Shäfer notes that the teamwork and team spirit evident at the MBSA plant serve as a positive for the Daimler group, with one area of possible concern being the skills levels of the South African workforce.

He says the level of technology prevalent in the new-generation vehicles “is going up tremendously”. He says it is important to “keep up” with the necessary training to improve skills levels, adding that it is “key for the country to work on its education system” and to catch up on a continuously “moving target”.

Van der Merwe adds that efficiency improvements and embracing new technology “are critical” to the sustained future of the South African motor industry.

He says the challenge of skills upliftment to sustain new technologies is high on MBSA’s agenda.

MBSA spent around R60-million on skills training to enable the production of the new C-Class.

APDP Here to Stay
Davies emphasises that government’s Automotive Production Development Programme (APDP) “is here to stay”.

The APDP, scheduled to end in 2020, is currently the subject of an industry review.

Davies hints strongly that the APDP should continue up to, and even beyond, 2020, saying that “we can take it for granted that there will be future consultations” on the programme, adding that “anyone in a decision-making position” will be able to see the benefits of the programme.

He says South Africa’s automotive industry is central to government’s efforts to “industrialise and reindustrialise” South Africa.

Davies notes that the Automotive Investment Scheme (AIS), a component of the APDP, has, since 2009, supported R22.5-billion in investments from the automotive industry, creating 9 756 jobs.

MBSA’s new C-Class project has received R1.6-billion in government support, the “biggest single investment by the AIS”, says Davies.

Edited by Creamer Media Reporter

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