Mercedes-Benz to invest $290 million in South Africa

Germany’s Mercedes-Benz plans to invest and open manufacturing plant in South Africa to tap growing African market.

Mercedes-Benz South Africa (MBSA), a unit of Daimler AG DAIGn.DE, plans to invest 2 billion rand ($290 million) to produce the next generation Mercedes-Benz C-Class models to be introduced to global markets in 2014.

The German automaker said in a statement on Tuesday the investment would be used to expand the technical capacity of its South African plant in East London to 65,000 units.

“Daimler AG is delighted to include South Africa among the four manufacturing locations around the world to build the next-generation C-Class,” said Wolfgang Bernhard, a member of Daimler AG’s board of management.

The new models will be built at Mercedes-Benz’s plant in East London, and will also be produced in China, Germany and the United States.

Daimler AG has invested more than 5 billion rand in South Africa over the past 10 years.

“In the first quarter of next year, we should reach the half-a-million mark of C-Class vehicles produced locally since 1994, which marked the model’s start of production in South Africa,” Hansgeorg Niefer, CEO of MBSA, said in a statement.

Mercedes-Benz said the investment was a vote of confidence in the local operations.

In September, General Motors (GM) GM.UL said it planned to invest 1 billion rand in South Africa over the next two years as it builds up its export business in sub-Saharan Africa.

This new investment comes on the heels of General Motors restructuring its African operations to solidify its position on the continent.  The more competition, the better for Africa in the long run, especially from global brands like General Motors and  Mercedes-Benz.

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