Possible Chinese auto INVESTMENT for East London
A joint venture can enhance the most crucial manufacturing hub in East London. But what does a potential Mercedes- Benz partnership with a Chinese OEM, entail?
M
ercedes-Benz’ s assembly plant on the west bank of the Buffalo River, in East London, is one of its most esteemed global assets. Master technicians have been building the very best Mercedes- Benz luxury sedans here for decades. This was also the only global Mercedes-Benz factory allowed to build the brand’ s apex model, the S-Class, outside of Germany.
Over the last few decades, C-Class has been the anchor model for the East London factory, built for export, mainly to Europe and North America. But as the market for compact luxury sedans has been usurped by crossovers, the Mercedes-Benz East London factory has risked overcapacity and underproduction. Tariff issues have further compounded the demand problems and viability of Mercedes-Benz South Africa’ s automotive assembly business.
For East London and its associated automotive suppliers in Buffalo City, Mercedes-Benz’ s factory is crucial. It is the apex manufacturing buyer in East London, and without it, the downstream effects on suppliers and smaller businesses in the automotive aftermarket would be disastrous.
With its sophisticated tooling, extensive rooftop solar installation, and status as a direct-to-keyside port factory, Mercedes- Benz’ s East London factory has many advantages. And industry insiders are speaking of Chinese internet companies using some of the excess capacity.
This would not be the first time that Mercedes-Benz’ s East London factory has hosted or built vehicles without a threepointed star badge. During the 1980s and 1990s, Mercedes-Benz South Africa built Hondas for the domestic market. And it has even gone beyond passenger cars, and built bakkies, too. Mitsubishi’ s Colt and Triton bakkies were also built in the East London factory, from the late 1990s to early 2010s.
WHY THE CHINESE ARE INTERESTED
The port location, for ease of component imports and vehicle exports, and its proven adaptability to different body types, from luxury sedans to bakkies, make the Mercedes-Benz East London plant so valuable.
The interested party is allegedly GWM. Chinese vehicles have dramatically increased their market share in South Africa, with two brands leading: GWM and Chery. With Nissan’ s Rosslyn assembly factory being purchased by Chery earlier this year, GWM is recognising the advantages that a jointventure utilisation agreement with Mercedes- Benz would have for it.
It’ s unclear which models GWM would potentially build in East London, but the factory’ s proven configurability across several body types gives GWM many options. It could build compact crossovers or its
P-Series bakkies, leveraging the legacy knowledge of technicians who worked on the Mitsubishi Triton line at the East London facility.
For the South African automotive aftermarket and suppliers working in East London, a thriving Mercedes-Benz facility running at peak capacity is invaluable. Issues? Although GWM appears to be the lead party in discussions with the Department of Trade and Industry and Mercedes-Benz regarding the utilisation of the East London factory’ s capacity, there are other interests to consider. Two other Chinese automotive companies, Geely and BAIC, each hold just under 10 % of Mercedes-Benz AG’ s publicly traded shares, which could influence stakeholder negotiations.
WORDS IN ACTION 23 MARCH 2026