Mercedes Benz plans to push ahead with a R3-billion investment plan, despite other car makers' concerns over labour instability.
Mercedes-Benz plans to push ahead with a R3-billion investment plan in South Africa that will see it increase local output to 100 000 units a year.
In an interview with Bloomberg news on Wednesday, the truck and luxury carmaker's South Africa chief executive Martin Zimmermann said the outlook for growth in Africa's biggest economy is "very positive", and the company will introduce new technology and a third shift to its local plant, which produces about 60 000 units a year at present.
"Mercedes's commitment to South Africa comes less than two weeks after Bayerische Motoren Werke AG [BMW], the world's largest maker of luxury vehicles, said it would stop expansion in South Africa after labour strikes that shut down plants in August and September cost it 13 000 cars in lost production," Bloomberg reported.
The carmaker's comments caused concern that unpredictable output, as a result of strike action, would see investors slowly move away from South Africa's vehicle manufacturing sector.
Also on Wednesday, the Ford Motor Company announced it had built its three-millionth unit in South Africa and reaffirmed its commitment to the country.
Ford said it had been an active participant in the South African automotive industry since 1923, and has invested substantially in South Africa.
"For South Africans this translates into world-class training and the transfer of skills to the benefit of the country and its people. This up-skilling will also result in higher quality products produced at a lower cost," Ford said in a press release.
Jeff Nemeth, president and chief executive of Ford Motor Company of Southern Africa said the company produce around 370 vehicles a day and has invested R3.4-billion into South Africa in order to transform the company's local facilities to produce the Ford Ranger and Duratorq engine. Annual capacity has been increased at the Silverton assembly plant to 110 000 units with approximately 3 100 people employed in South Africa.
"Today we celebrated a huge milestone. As much as our heritage is American, we're South African too. We're one of the longest operating car manufacturing companies in South Africa, and this milestone speaks to our commitment to the local market," said Nemeth.