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Mercedes Expanding In South Africa, Ford Hanging In Despite Strikes

Mercedes Expanding In South Africa, Ford Hanging In Despite Strikes

German carmaker Mercedez-Benz said it plans to spend $302 million expanding manufacturing in South Africa and Ford Motor Company reaffirmed its commitment to the country today.

Mercedes South Africa produces vehicles for the local and U.S. market, with plans to boost manufacturing from 60,000 to 100,000 vehicles a year, Bloomberg reported.

Both companies confirmed their commitment to South Africa before a meeting between vehicle manufacturers and South Africa’s Trade and Industry Minister Rob Davies, aimed at restoring confidence in the local industry following a series of lengthy strikes, according to a report in in SouthAfrica.info.

BMW South Africa Director Bodo Donauer said lengthy strikes in South Africa’s automotive sector cost the company 15.8 percent of its annual BMW 3 Series volume – most of which was destined for major export markets – along with an opportunity to compete for a potential second model, according to a statement released by the Department of Trade and Industry.

Mercedez-Benz South Africa CEO Martin Zimmermann said the company would invest $302-million to expand production at its manufacturing plant in East London and  introduce new technology and a third shift to boost production from the current 60,000 vehicles to 100,000 a year.

Ford has no plans to cut back on its operations in South Africa, Ford global president and CEO Alan Mulally told Business Day on the opening day of the Johannesburg International Motor Show.

Ford’s assembly plant in Silverton, Pretoria remains key to its global operations, and Mulally suggested that its importance could grow following a decision to create a new Ford division for the Middle East and Africa.

The company’s Silverton plant, along with its engine plant at Struandale outside Port Elizabeth, produces Ford Ranger pickup trucks for export to 148 countries, mainly in Africa and Europe.

Mulally said Ford has no plans to start manufacturing elsewhere in Africa.