Mercedes-Benz SA has confirmed its KuGompo City (formerly East London) plant will build the facelifted C-Class, providing some reassurance about the factory’s immediate future — but the collapse in vehicle exports to the US raises questions about the longer term viability of local production.
South African vehicle exports to the US plunged 83.2% from 24,682 units in 2024 to 4,136 in 2025 after the US imposed a 25% tariff on imported vehicles and automotive components.
Almost all the vehicles exported to the US were C-Class models built by MBSA at its KuGompo City assembly plant, making the factory particularly vulnerable to the loss of access to the US market.
MBSA significantly scaled back C-Class exports to the US after the imposition of the tariffs and the lapse of tariff-free provisions under the African Growth and Opportunity Act (Agoa).
The plant has seen production halts, shift reductions and layoffs, putting pressure on jobs directly and indirectly linked to the factory.
In June and July 2025, MBSA suspended vehicle manufacturing operations at the plant, which has built the current C-Class range since 2021 after a R13bn investment.
More than 90% of its production is exported, mainly to North America, Europe and Asia.
Even before the tariffs, the factory’s economic viability was under pressure after MBSA retrenched about 700 workers in June 2024 because of falling global demand for the C-Class, and cut daily production shifts from three to two.
We are continuously assessing the impact of the introduced US-tariff lines for the auto industry. It is important that South Africa and the US remain in a constructive dialogue and reach a fair negotiated solution that is in the interests of both sides
— Nandi Pretty-Girl Jiyane, MBSA spokesperson
MBSA declined to comment directly on speculation that it could sell the KuGompo City plant and become a full vehicle importer.
“We are continuously assessing the impact of the introduced US-tariff lines for the auto industry.
“It is important that SA and the US remain in a constructive dialogue and reach a fair negotiated solution that is in the interests of both sides,” said MBSA spokesperson Nandi Jiyane.
She did not comment on a March Bloomberg report that Chinese manufacturer GWM was in discussions on sharing MBSA’s factory to boost the viability of a plant that has produced Mercedes-Benz vehicles since 1958.
Asked whether the facelifted C-Class, unveiled in Germany this week, would continue to be built in KuGompo City, Jiyane confirmed it would.
The plant is “focused on the production of the C-Class for many global markets”, she said, adding MBSA generally does not comment on speculation about future product portfolios and production planning processes.
The company’s confirmation comes against the backdrop of a dramatic collapse in SA vehicle exports to the US.
The US was historically one of the most important export markets for SA-built vehicles.
US President Donald Trump’s 25% tariff on vehicles, introduced in April 2025, and on components in May, effectively wiped out the preferential market access SA manufacturers had enjoyed under Agoa.
Agoa’s 2.5% duty saving on passenger car exports to the US was a major boost for SA’s motor industry over the past 25 years. Vehicle exports to the US increased from 853 units in 2000 to 14,873 in 2001, the first year of Agoa.
The extension of Agoa is an important and welcome development — but for South Africa’s automotive industry, market access on paper must translate into commercially competitive access in practice
— Shinny Gobiyeza, Naamsa interim CEO and COO
Agoa expired in September 2025 and the US Senate recently voted to extend the programme until the end of 2028.
But the 25% tariff effectively nullifies the benefit for vehicle exports, the National Association of Automobile Manufacturers of SA (Naamsa) said this week.
“The extension of Agoa is important and welcome — but for SA’s automotive industry, market access on paper must translate into commercially competitive access in practice,” said Naamsa interim CEO and COO Shinny Gobiyeza.
Though exports to Canada and Mexico increased in 2026, they have not completely compensated for the loss of US business, Naamsa said, adding SA needed a durable trade arrangement with the US that supports production, protects investment and sustains jobs.
Naamsa said SA would continue negotiating with the US while pursuing alternative export markets, but the 25% automotive tariff remains a significant threat to future export growth and industrial expansion.
The US remained SA’s fourth-largest automotive export destination in 2025, with exports valued at R20.4bn. Automotive imports from the US were valued at R23.6bn, making it the fifth-largest source of imports and the industry’s fourth-largest overall trading partner.
Naamsa highlighted opportunities to diversify exports. About 85.1% of SA vehicle and component exports went to Sadc countries in 2025, while new automotive rules of origin under the African Continental Free Trade Area could help expand regional production and supply chains.
The impact extends beyond trade figures. The automotive sector accounted for 23.8% of SA’s manufacturing output in 2025 and is a major contributor to employment, export earnings and industrial investment.
The industry contributes 5.2% to GDP and sustains 498,000 jobs. — Business Day
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