Mercedes-Benz is considering allowing China’s Great Wall Motor (GWM) to use its South African factory as US trade tariffs cloud the site’s long-term viability.

The German automaker is in discussions with GWM over potential co-manufacturing at its facility in the port city of East London.

According to a Bloomberg report, representatives from GWM have presented a proposal to senior officials at South Africa’s Department of Trade, Industry and Competition outlining the Chinese company’s interest in manufacturing vehicles at the plant.

In an emailed statement to Just Auto, a company spokesperson said: “Mercedes-Benz strives to ensure that all its production sites remain globally competitive, are at an optimal operating point and are adapted to new requirements whenever necessary.”

The spokesperson added that the company does not “comment on speculations about future product portfolio and production planning process”.

GWM South Africa said it continues to evaluate opportunities to expand its presence in the country but did not provide further details.

Talks between the two companies are ongoing with no agreement finalised, though alternative forms of cooperation remain under consideration.

Allowing another manufacturer to produce vehicles at the plant could help address unused capacity, lower operating costs and support jobs as global carmakers face growing competition from lower-cost imports from China and India.

Mercedes is simultaneously assessing whether the East London plant could be repurposed as a global centre for processing end-of-life batteries from passenger vehicles.

The facility has produced the C-Class sedan for export to the US since 1997.

Previously, the plant benefited from the African Growth and Opportunity Act, which allowed vehicles exported from South Africa to enter the US duty-free.

However, the plant’s outlook changed after President Donald Trump imposed a 30% tariff on South African goods entering the US in August last year.

Although the US Supreme Court suspended the measure in February, the administration is preparing to introduce a 15% global levy on imports into the US starting this month.

Mercedes invested around €600m ($694m) in 2022 to upgrade the East London manufacturing facility.

"Mercedes considers sharing South Africa plant with China’s GWM" was originally created and published by Just Auto, a GlobalData owned brand.

 

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