OWN CORRESPONDENT, Johannesburg | Wednesday 5.00pm
DAIMLERCHRYSLER South Africa is set to halt production of Honda vehicles from mid-year to make room for increased output of its Mercedes-Benz C-class models, the Business Day reported on Wednesday.
The company, a subsidiary of US-German automaker DaimlerChrysler, said it would issue a statement shortly and declined further comment.
The paper, quoting DaimlerChrysler SA chairman Christoph Kopke, said the group would not retool its East London manufacturing plant for new Honda Civic and Ballade models that it had been producing under licence for the Honda Motor Co Ltd.
It said that from next January, fully-built Honda models would be imported from Japan to supply the South African market. More than 17000 Hondas have been assembled at the plant.
”We have taken this serious business decision in the light of the Motor Industry Development Programme requirement for both high-volume car production and required investment support for the local production of such models,” Kopke was quoted as saying.
The MIDP, introduced in 1995 after lengthy talks between government, labour and auto-industry players, sets policy guidelines for South Africa’s motor sector. It discourages the profileration of small-volume output while encouraging exports.
DaimlerChrysler SA said there would be no job losses from its decision as employees could be deployed in other tasks.
The plant, based at East London in South Africa’s impoverished Eastern Cape province, is currently being expanded after a R900-million investment last year by its parent.
The announcement comes at a time when South Africa’s motor industry and public is still reeling from news last week that debt-laden Hyundai Motor Distributors, which assembles Hyundai and Volvo cars in Botswana, had gone into liquidation. — Reuters