Focus on localisation and supplier competitiveness
East London – Following the unique component supplier initiative which Mercedes-Benz South Africa (MBSA) introduced last year, in collaboration with the Department of Trade and Industry (DTI) and the East London Industrial Development Zone (ELIDZ), MBSA last week held discussions with a large contingent of its component suppliers to discuss the prerequisites for continued and sustainable future operations at its plant in East London.
The programme aims to encourage further local growth in the component supply chain and to openly debate the various challenges facing the industry. “We wish to achieve a larger measure of localisation and improved competitiveness in this important part of the SA auto industry. The auto manufacturers, in partnership with component suppliers, need sustained growth. Together we are a key contributor in the manufacturing sector and to the economy as a whole,” says MBSA President and CEO, Dr Martin Zimmermann.
According to NAAMSA (National Association of Automobile Manufacturers of South Africa) the automotive industry contributes in excess of 6% annually to the country’s GDP and is responsible for well over 28,000 jobs.
Following the announcement by Daimler AG, MBSA’s parent company, in December 2010 to invest a sizeable R2 billion into the local plant for the production of the next-generation Mercedes-Benz C-Class, the South African group’s has engaged extensively with various interest groups, including all its suppliers, the DTI and the ELIDZ, to find ways of enhancing the local industry’s global competitiveness, and in attracting more international component manufacturers to invest in SA, establish large-scale production here and thus contribute to create more jobs and a wider industry infrastructure. “Production of the next-generation Mercedes-Benz C-Class, to be launched in 2014, provides very interesting opportunities both for MBSA as well as for our suppliers,” explains Dr Zimmermann. “Last year our plant produced over 54,000 C-Class vehicles. This production was complemented by an expanding manufacture and assembly facility for Mercedes-Benz trucks and bus chassis, and Freightliner and FUSO trucks.”
Dr Klaus Zehender, responsible for Procurement Mercedes-Benz Cars and Vans at Daimler AG in Germany addressed the delegation, saying: “MBSA’s commitment to a future business and production plan that is competitive globally was crucial in Daimler AG’s decision to extend production activities in South Africa. Following this it is now vital that all component suppliers based in South Africa seek out every opportunity to further improve their competitive position, either through their own production optimisation, relevant plant and equipment upgrades, investments and expansion and most importantly, employee training.”
The Minister of the Department of Trade and Industry, Rob Davies, publicly expressed support for the initiative at the introduction of the programme last year and pledged the South African government’s commitment to finding optimum solutions within the scope of the existing and future legislative framework for a significant strengthening of the automotive industry in South Africa.
“This initiative, spearheaded by MBSA, has a two goal approach. One aim is to encourage the expansion of component suppliers already based in South Africa” explained the MBSA host at the supplier engagement, Arno van der Merwe, Vice-president at MBSA responsible for manufacturing. “The second aim is to encourage other global component suppliers not yet producing in South Africa to join our industry, either through joint ventures or new establishments here and so bring with them their access to global research and development, and innovative technologies. The Mercedes-Benz plant in East London follows exceptionally good global processes and standards outlined in the Mercedes-Benz production system for all Mercedes-Benz passenger cars plants worldwide,” added Van der Merwe.
With the next-generation Mercedes-Benz C-Class, more than a dozen new technologies will come to South Africa in the car and production processes. More investors and new suppliers, all with the latest technologies, are expected to strengthen the entire automotive value chain.
At the Mercedes-Benz East London plant, preparations for the next-generation C-Class, to be launched in 2014, will continue throughout 2012 and 2013. In line with progress of equipment installations featuring some of the very latest manufacturing technology available, there is a special focus on training programmes to meet additional demand for skilled job categories such as technicians and equipment specialists.
Dr Zimmermann concludes, “With the pledged support of the South African Government, MBSA plans to make optimum use of the South African regulatory environment and leverage the advantages presented through the Government’s Industrial Policy Action Programme (IPAP), as well as the Automotive Investment Scheme (AIS) and the future Automotive Production Development Programme (APDP).”
MBSA aims to remain at the forefront of local automotive growth and this initiative provides a mechanism for sustainable engagement between government, and international and local interests.