East London-based Mercedes Benz South Africa’s (MBSA) performance last year was the outcome of the R5-billion investment in plant infrastructure to build the new C-class model as well as a commitment by all employees to the company’s development.
Record turnover of R65.8-billion was the result of production increases and not simply a fillip from an exchange rate that benefits exporters, chief executive officer Arno van der Merwe told the Daily Dispatch, while acknowledging auto exports are key to benefiting from SA’s Automotive Production and Development Programme.
“It’s important that the inflationary effects are not as bad as the currency devaluation effects and that we’re a net exporter in a stable business position,” Van der Merwe said.
He said the plant doubled its production of passenger vehicles from 2014’s 48100 units to 102200 last year, while employees continued record attendance figures of 99.3% for the year.
The lower build in 2014 largely reflected the gradual production ramp-up for the new C-class model, but last year’s figures showed the company deploying its full build capacity.
The low absenteeism figure reflected the company’s longstanding goal to ensure a common mission within the plant between management and workers.
Average absenteeism figures in the country can reach up to 7%, according to research reports.
“To be at 0.7% is a very good benchmark. We’ve been running at these levels for a good 10 years,” said Van der Merwe.
He attributed the good attendance to motivation, commitment, discipline and having structures in place “to understand people’s issues and why they are not at work”.
The company also has a 15-year long performance-based incentive scheme which rewards good attendance.
By outperforming other plants in the Daimler Group and being willing to produce a wider range of product derivatives, the local assembly line had been rewarded with C-class export orders as part of the group’s “flexible production network”.
MBSA currently exports to 80 markets, including right-hand drive markets like the UK, Japan and Australia, while sales of left-hand drive vehicles to the US were re-instated in October last year.
The previous C-class model enjoyed significant export success to the US on the back of Asgisa trade tariff concessions. Coinciding with the production runout of that model in South Africa, C-class production capacity for the US market was commissioned in 2014, but the flexible operational plan has given the West Bank facility a further export opportunity.
“This ability to take over models and derivatives for so many different markets gives us an opportunity when the group shifts production.”
Van der Merwe said the German-owned car company had not experienced any negative impacts in the US market of the Volkswagen diesel emissions scandal, when the company was found to have cheated on carbon emissions into the atmosphere.
“We have very clearly positioned ourselves on this matter, on the manipulation of data. We do not do that.”
On relations with Buffalo City Metro, the CEO said there were many areas of cooperation between the company and the local authority, while the memorandum of understanding signed in 2011 was still active. “We’ve had good engagement around electricity provision where we had to get through the load-shedding phase, working together in terms of infrastructure upgrades.”
However, while “as a corporate citizen we get the services we need”, MBSA “would like to see that this is extended to the broader environment”.
This would include “an effective programme for maintenance of at least our main arteries in and out of East London”, including an “attractive” entrance to the city from the airport.
“We do not want to have that in a state which makes investors uneasy and not sure about what they will experience in BCM.”
He said that stability in leadership had to be placed “high on local government’s agenda”, including filling key posts like that of municipal manager where incumbent Andile Fani remains suspended.
MBSA’s investment pays off
Record turnover of R65.8-billion was the result of production increases and not simply a fillip from an exchange rate that benefits exporters, chief executive officer Arno van der Merwe told the Daily Dispatch, while acknowledging auto exports are key to benefiting from SA’s Automotive Production and Development Programme.
“It’s important that the inflationary effects are not as bad as the currency devaluation effects and that we’re a net exporter in a stable business position,” Van der Merwe said.
He said the plant doubled its production of passenger vehicles from 2014’s 48100 units to 102200 last year, while employees continued record attendance figures of 99.3% for the year.
The lower build in 2014 largely reflected the gradual production ramp-up for the new C-class model, but last year’s figures showed the company deploying its full build capacity.
The low absenteeism figure reflected the company’s longstanding goal to ensure a common mission within the plant between management and workers.
Average absenteeism figures in the country can reach up to 7%, according to research reports.
“To be at 0.7% is a very good benchmark. We’ve been running at these levels for a good 10 years,” said Van der Merwe.
He attributed the good attendance to motivation, commitment, discipline and having structures in place “to understand people’s issues and why they are not at work”.
The company also has a 15-year long performance-based incentive scheme which rewards good attendance.
By outperforming other plants in the Daimler Group and being willing to produce a wider range of product derivatives, the local assembly line had been rewarded with C-class export orders as part of the group’s “flexible production network”.
MBSA currently exports to 80 markets, including right-hand drive markets like the UK, Japan and Australia, while sales of left-hand drive vehicles to the US were re-instated in October last year.
The previous C-class model enjoyed significant export success to the US on the back of Asgisa trade tariff concessions. Coinciding with the production runout of that model in South Africa, C-class production capacity for the US market was commissioned in 2014, but the flexible operational plan has given the West Bank facility a further export opportunity.
“This ability to take over models and derivatives for so many different markets gives us an opportunity when the group shifts production.”
Van der Merwe said the German-owned car company had not experienced any negative impacts in the US market of the Volkswagen diesel emissions scandal, when the company was found to have cheated on carbon emissions into the atmosphere.
“We have very clearly positioned ourselves on this matter, on the manipulation of data. We do not do that.”
On relations with Buffalo City Metro, the CEO said there were many areas of cooperation between the company and the local authority, while the memorandum of understanding signed in 2011 was still active. “We’ve had good engagement around electricity provision where we had to get through the load-shedding phase, working together in terms of infrastructure upgrades.”
However, while “as a corporate citizen we get the services we need”, MBSA “would like to see that this is extended to the broader environment”.
This would include “an effective programme for maintenance of at least our main arteries in and out of East London”, including an “attractive” entrance to the city from the airport.
“We do not want to have that in a state which makes investors uneasy and not sure about what they will experience in BCM.”
He said that stability in leadership had to be placed “high on local government’s agenda”, including filling key posts like that of municipal manager where incumbent Andile Fani remains suspended.
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