The rich history of the only premium sedan manufactured in the country was celebrated recently with a stakeholder dialogue, hosted by Mercedes-Benz South Africa.
The gathering, which saw key players in the sector, the government and the private sector give insight into and reflect on issues affecting the industry, was hosted at the home of the cutting-edge W206 C-Class in celebration of 65 years of “manufacturing excellence” at the East London plant.
Servicing more than 80 countries from around the world, the plant in the Buffalo City Metro Municipality produces the C-Class for export to left and right-hand drive markets.
It is among the four manufacturing plants that form part of the global production network for the C-Class, the others being in China, the US and in Bremen, Germany. The latter is the lead plant.
Keynote speaker, economist Dr Thabi Leoka of Naha Advisory, an economic advisory and consulting company, raised concerns about unemployable youths and the shrinking of earnings in manufacturing, a high revenue-generating sector that needed to grow more rapidly.
She said the manufacturing segment had contracted, although it was an exporter and had the potential to create many jobs.
“Sectors that employ the most, and that we get a lot of revenue from in terms of exports and imports, are not growing. Manufacturing is shrinking.
“The fastest growth is in the finance sector, which employs highly skilled and educated people. It’s not, however, tradeable and doesn’t give us the revenue that we need.
“Manufacturing, however, typically employs low-income workers. It is tradeable, and we get very high revenues from it, especially through exports,” she said.
Leoka said stakeholders needed to work together towards a pipeline of eligible, employable youths to help sustain manufacturers and keep them in the country.
“When multinational organisations like Mercedes-Benz invest in this country, they want to expand and employ.
“Who will they employ when young people looking for work cannot be absorbed into the labour market? If 64% of the younger generation are not at school or not in training, investors are frightened off because they question who they will employ if skilled labour is so scarce.”
Leoka emphasised the importance of the government creating an environment that enabled young people to be employed and trained by large companies.
Looking back on 65 years of manufacturing, Mercedes-Benz chief executive Andreas Brand said the multinational had had a great effect on the South African economy and the motor industry.
“For the past 65 years, we have had a substantial impact on the South African automotive industry and supply chains,” he said.
“In celebration of the 65 years we want to bring together key stakeholders to exchange new insights, strengthen existing relationships, build new connections and collaboratively problem-solve to lead innovative solutions to ensure the automotive industry and supply chain is better equipped to face future challenges.”
Brand said, like most businesses, South Africa’s electricity problem was among the biggest challenges for the plant, which produces the C-Class, and its performance derivatives, the most recent being the AMG C63.
“The power crisis is a big problem for us and it’s in three pillars: load-shedding, electric capacity and also the quality of electricity. And to defend ourselves from this we have additional capacity.
“We are putting R16 million against a fault voltage regulator which protects us from those dips and peaks.”
He stressed the urgent need to address this challenge, which was negatively impacting the automotive manufacturing sector.
Mercedes-Benz anticipates that, by 2026, half of total sales will be electric vehicles. It aims to go all-electric by the end of the decade, depending on local market conditions.
The auto giant launched a diverse range of electric vehicles onto the local market last year — the EQA, EQB, EQC, EQE and EQS. Plans are in place to add two more — the EQE SUV and EQS SUV — by the end of this year.
The company wishes to shape the future and is a player in all three markets: combustion engines, hybrids and full EVs.
“I would love to see a country that fully uses its potential, from raw materials to full batteries being assembled here, as well as the drive-train of a fully electric car.
“That’s where the beauty lies in countries — we can embrace an opportunity that currently does not exist because most of us import our engines. Let’s change that mindset and think innovation,” Brand said.
In addition to energy, he highlighted the urgent need for South Africa to invest in logistical infrastructure — such as roads and port facilities — to support export activities.