Daimler will invest $302 million in South Africa

Article by Christian Andrei, on October 18, 2013

Even with the ongoing labor conflict in South Africa, Daimler will proceed with investing a 3 billion rand ($302 million) in the country to increase the output of the Mercedes-Benz C-Class. At the start of September, the workers of Mercedes, BMW and Ford Motor Co. went back to work to finish three weeks of industrial action over pay.

Because of the strike, automakers lost about 20 billion rand ($2 billion). Mercedes aims to present new technology and a third shift at its East London plant to increase capacity to 100,000 units annually, according to Martin Zimmermann, Daimler’s South Africa CEO. Presently, the plant produces around 60,000 units a year of the C-class sedan for the local and U.S. markets, along with several commercial vehicles.

Mercedes' commitment to South Africa arrives less than two weeks after BMW said it will put expansion in South Africa on hold after the strikes that closed plants in August and September cost it 13,000 cars in lost production.

On Oct. 7, the country's Finance Minister Pravin Gordhan said that the fact that BMW revised its plans is a "worrying sign.” Zimmermann said that it will take six to seven weeks for Mercedes to recover the lost production from the strike. He added that the company has a “significant order book." He said that the Africa's biggest economy has a “very positive” outlook for growth.

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