DaimlerChryslerSA will continue producing vehicles for the export market at current volumes irrespective of whether it secures the contract to build the next C-Class, the company’s chief executive, Christoph Köpke, said on Thursday.
DaimlerChryslerSA will continue producing vehicles for the export market at current volumes irrespective of whether it secures the contract to build the next C-Class, executive Christoph Köpke said on Thursday.
DaimlerChrysler SA is one of the leading producers of the C Class range of Mercedes Benz in the global automotive group and a modernised C Class vehicle would have 12 per cent more South African-made content in them.
The South African operation is also bidding to manufacture the new E Class, but indications are that it was not going to get it. In addition, the downturn in the German economy, along with pressure from trade unions to produce more vehicles there, was said to have turned the tide against a production increase in SA.
Köpke said: “The challenge remains to make South Africa competitive in terms of global manufacturing standards. The extension of the EU remains a concern, as is the fact that South African automotive workers are highly paid relative to their international counterparts… A strong supplier base will remain critical to the success of DCSA’s export programme.”
“The objective is simple… the company must build the best C-Class in the world,” he added.
He said that if South Africa wanted to attract more investment to the domestic car industry, it would “have to increase its total vehicle production to between 600 000 and 700 000 units a year”.
“And if you cannot sell at least 20 per cent of output on the local market it makes no financial sense to increase production,” he added, referring to the ongoing issue of vehicle affordability.
“To increase production to 700 000 units, the local economy would have to grow by at least five per cent a year.” The only way for the economy to grow at that rate was through tackling the country's 30 per cent unemployment rate. This called for joint efforts from labour, government and business, Köpke added.
The DaimlerChryslerSA boss said he was happy with the group's performance for the past year. The company increased revenue seven per cent to R22,5bn but new vehicle sales slipped from 42 700 to 40 800.
Original article from Car