Mercedes-Benz SA (MBSA) has halted production for an extended period at its award-winning East London plant due to falling global demand for its flagship C-Class sedan, marking a rare deviation from its annual August maintenance shutdown.
While planned August shutdowns for maintenance and retooling are standard at many high-end manufacturing plants, MBSA confirmed that the 2025 pause had been extended as part of broader “production volume adjustments”.
MBSA corporate affairs GM Thato Mntambo said the company had been in close contact with key stakeholders, including suppliers, before the decision.
“MBSA has kept all relevant stakeholders informed regarding the planned non-production period, which is driven by reduced production volumes,” Mntambo said.
She added that the plant’s employees had also been briefed.
“They will participate in training and upskilling programmes during the shutdown and will be compensated in line with provisions of the collective bargaining agreements under the National Bargaining Forum.”
The timing of the announcement follows news of a senior leadership reshuffle.
MBSA CEO and executive director: manufacturing Andreas Brand will step down on November 30 to take up a global role in Stuttgart, Germany, as executive: production network CKD and mid volume at Mercedes-Benz AG.
His successor, long-time senior executive Abey Kgotle, at present executive director of human resources and corporate affairs, will assume the role of MBSA CEO on December 1.
Brand will remain in his current role until the end of November to ensure a smooth handover.
MBSA’s East London facility has long been considered one of the Mercedes-Benz company’s top-performing global plants, consistently achieving high performance scores and winning several international awards.
The R16bn investment in the facility to accommodate the latest-generation C-Class was widely viewed as a turning point in the company’s growth trajectory in SA.
However, waning international demand for the C-Class has forced the company to scale back operations.
In 2024, MBSA announced plans to retrench more than 700 workers — more than a quarter of its workforce — invoking Section 189 of the Labour Relations Act, which allows for dismissals due to operational requirements.
Between 2021 and 2023, high global demand for the C-Class led to increased production and hiring.
At its peak, the plant exceeded all key performance targets.
But with sales slowing globally, MBSA has begun taking what one executive described as “draconian but necessary” steps to remain viable.
The impact on the regional economy is expected to be severe.
An estimated 20,000 workers are employed by the 18 or so component suppliers located mainly in the East London Industrial Development Zone.
Those firms have not yet indicated how they plan to respond to the production slowdown.
Wider still, analysts estimate that as many as 160,000 people in East London depend directly or indirectly on MBSA for some or all of their income, underscoring the plant’s importance to the local economy.
The C-Class, introduced in 1993, has been a cornerstone of MBSA’s manufacturing operations for more than three decades.
Now in its sixth and final generation, the model’s future in SA remains uncertain as the company shifts focus globally towards electric vehicles and more flexible production platforms.
With the East London plant entering a new and uncertain chapter, questions remain about what product — if any — will replace the C-Class on its lines.
Both Cosatu and the SA Federation of Trade Unions (Saftu) have called on the axed workers to fight a retrenchment “bloodbath”.
MBSA recently said the current situation would not cause more job losses: “We do not anticipate any further restructuring of our manufacturing operations because of this non-production period.”
Daily Dispatch
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