Production of new range is said to have created 600 new jobs at the East London plant and another 2000 at suppliers

German carmaker Mercedes-Benz’s latest R10bn investment in its SA subsidiary has created about 2,600 new jobs, Jorg Burzer, the group’s board member for production and supply chain management, said on Thursday.

Production of the latest C-Class car range began on Thursday at Mercedes-Benz SA’s (MBSA) East London assembly plant. The first vehicles are due to roll off the assembly line over the weekend.

The sixth-generation C-Class, codenamed W206, replaces the W205, which has been made in SA since 2014. During the seven years of production, about 650,000 cars were built, the last one completed on May 13.

The R10bn investment, announced in 2018, has enabled MBSA to undertake an expansion and a complete update of its East London plant, including the paint shop, assembly line and warehousing.

The company says there are more than 500 automated robots in the new body shop. Burzer said the expansion had allowed MBSA to add 600 jobs to its 4,000-strong East London workforce. A further 2,000 had been created at suppliers.

MBSA CEO Andreas Engler said the company had appointed several new local suppliers to provide components and sub-components. These included black-owned companies, some managed by MBSA employees.

On the old C-Class, the local content value was 35%-40%. Engling would not commit himself on a figure for the new car, beyond saying it would be higher.

However, he admitted MBSA would struggle to meet the 60% industry target set by government in its 2021-2035 SA Automotive Masterplan, which is due to be introduced on July 1.

“That’s not an easy way to go,” he said.

It would be easier if engines — one of the costliest items in a vehicle — weren’t fully imported for the C-Class. But Engling said: “We don’t want to localise the engine.”

To do so would be very complicated. As with the cars they replace, most of the new C-Classes will be powered by internal combustion engines (ICE), which use petrol and diesel.

The rest will be plug-in hybrids, which rely on a combination of ICE and electric motors.

Trade, industry and competition minister Ebrahim Patel recently released a green paper outlining plans to encourage the local sale and manufacture of electric vehicles.

Over the likely seven-year lifespan of the new C-Class, the hybrid share of production could grow significantly, meaning demand for the two engine types is uncertain.

Burzer, however, said it would make no difference to the East London vehicle-assembly process. “We don’t know yet what the hybrid ramp-up will be,” he said, “but the assembly line has very high flexibility. If necessary, it can do 100% hybrid.”

Engling said that after taking “a huge dip” in 2020 because of Covid-19, East London production recovered “very nicely” in the first quarter of 2021. He expected the plant to work two daily shifts in coming weeks before returning to three shifts at the end of September as volumes increased.

In line with the German parent company’s refusal to release sales or production numbers for global operations, Engling would not reveal East London’s past or future volume plans or even its production capacity. However, he said over 93% of production was exported. The former East London C-Class went to more than 90 destinations. The new one, which is also built in Germany and China, will go to about 110.

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