EL Mercedes loses lucrative US contract

EAST London’s MercedesSouth Africa factory has lost its lucrative order to export Cclass cars to the United States, once the new generation of the luxury vehicle is launched next year.

The export programme – worth billions of dollars – will continue until the last of the current range of locally-produced Cclass vehicles is shipped from East London to the US. However, the company has confirmed that the new model will not be exported to the US, which will source the new Cclass lineup from its Tuscaloosa plant in Alabama from 2014.

The company confirmed the cancellation of the export order in a brief statement, saying it has yet to confirm with parent company, Daimler AG, which export destinations will replace the US. MBSA said the change in export contracts was not expected to impact production volumes in East London. The company expected further growth in production volumes with the W205 launch.

MBSA will supply the local market for the new C-class vehicles, codenamed the W205, from East London.

The C-class exports made MBSA the biggest beneficiary under the trade benefits of the US’s Africa Growth and Opportunity Act (Agoa).

This week, on a visit to East London, US consul in Cape Town, Erica BarksRuggles, expressed surprise at the news that MBSA had lost the order.

“They export most of their local production to the US and the duty-free tariff is really very important for that. (The decision to stop exports to the US) may be their corporate decision but that has nothing to do with us,” she said.

MBSA Corporate affairs divisional manager Mayur Bhana said the company supported the extension of the Agoa accord, which ends in 2015.