Mercedes-Benz SA (MBSA) has reaffirmed its long-term commitment to SA, with outgoing chief executive Andreas Brand saying the industry should focus on creating space for new players alongside established manufacturers.
Brand was speaking on the first day of the annual SA Auto Week held at the Coega Vulindlela Village on Wednesday.
MBSA, which manufactures its C-class models in East London, was expected to be the hardest hit manufacturer by the 30% tariffs introduced by US President Donald Trump in July.
But Brand, who passes the baton to Abey Kgotle in just under two months, said there was no need to panic.
“I believe the team at East London does an excellent job in the middle of the life cycle of the C-class, so there is no need to panic. We need to do our job,” he said.
“Our decision on the current C-Class was made in May 2018.
“We are doing very well with the R13bn we have invested.
“The team does well in the manufacturing space and is driven by a strong export leg.”
Commenting on how the Automotive Production and Development Programme 2 (APDP) could be better used to regulate dumping as more industry players push for higher duties, Brand said the sector needed to think outside the box.
“We need to open the portfolio and broaden the landscape in the country, that is not me as a CEO but as an automotive stakeholder in this country.
“And I can only encourage the industry to think out of the box to make that happen, to broaden our manufacturing footprint in the country, our supplier base can, our skills base can,” he said.
APDP 2 supports local vehicle and component manufacturers through import tariff protection and rebate mechanisms, including the Production Incentive (PI) and the Volume Assembly Localisation Allowance (VALA).
On whether a higher duty should be imposed on completely built vehicles (CBU), Toyota SA chief financial officer Bronwyn Kilpatrick said other avenues could be explored, such as the ad valorem taxes.
“From a principal point of view, the tax has been about the same for the last 20, 30 years, but the curve has not moved.
“We’ve had the rand depreciate significantly over the last 30 years. Inflation costs drive it up.
“What was always intended for a luxury vehicle at R200,000 is now actually being charged on your entry-level vehicles.
“So I think that there are other ways in which we can stimulate the market and also use that tax as a way to make CKD (completely knocked down) more competitive in the country,” she said.
The Herald
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