Business

Mercedes-Benz May Leave SA And It’s Not Just About Cars

Published

2 months ago

July 16, 2025

Chiraag

Mercedes-Benz South Africa, US tariffs impact, East London factory risk, C-Class vehicle exports 2025, Naamsa vehicle data, Mlungisi Mvoko Mercedes-Benz comments, automotive job losses SA, SA vehicle export crisis, US trade policy impact, Joburg ETC

With exports collapsing and tariffs climbing, East London could lose one of its biggest economic anchors

If you’ve ever driven a C-Class Mercedes-Benz made in South Africa, there’s a good chance it came from the East London factory. For decades, that plant has been more than just a production line; it’s been a major employer, a symbol of German-South African collaboration, and a key part of the country’s export economy.

But that future is now hanging by a thread.

A series of escalating US tariffs is hitting South Africa’s export sector hard, and the automotive industry is feeling it most. According to acting Eastern Cape Premier Mlungisi Mvoko, Mercedes-Benz South Africa (MBSA) is seriously reconsidering its operations, and the numbers explain why.

A tariff tsunami

As of 1 August 2025, the US will impose a 30% tariff on key South African exports. This follows a 25% tariff introduced in April, on top of an existing 10% baseline. For manufacturers like Mercedes-Benz, that adds up to a massive cost barrier to one of their most critical markets.

And it’s already having consequences.

The National Association of Automobile Manufacturers of South Africa (Naamsa) has revealed that vehicle exports to the US have plummeted by 82% in the first half of 2025. From January to June, only 2,875 vehicles were shipped across the Atlantic, down from 16,112 in the same period last year.

The second quarter was even worse: a drop of 87% compared to 2024. Almost all of these were C-Class models built in East London, meaning the local plant is feeling the blow directly.

“You cannot imagine East London without Mercedes-Benz”

That was Mvoko’s warning, as he confirmed that MBSA has raised real concerns about staying in South Africa under the current conditions.

“Given these tariffs, it would be difficult,” the company reportedly told provincial officials. Mvoko said the brand was now being encouraged to explore alternative export markets, as the US is becoming increasingly unreliable.

The Eastern Cape government has already sent a delegation to Stuttgart, the home of Mercedes-Benz’s global headquarters, in a bid to salvage the relationship.

But the anxiety is real: thousands of jobs, regional development, and a core part of SA’s trade strategy are all tied to this one plant.

A domino effect on more than just cars

While Mercedes-Benz is the headline concern, it’s not alone.

According to George Sebulela, president of the African United Business Confederation (AUBC), the entire auto sector is vulnerable. Brands like BMW and Volkswagen also rely heavily on exports to markets like the US and could face similar pressure if the tariff regime holds.

Sebulela warned that the situation is bigger than one factory.

“South Africa exports a large volume of products to the US,” he said, including citrus, wine, macadamia nuts, platinum, manganese, and industrial machinery. These, too, could become collateral damage in the trade fallout.

“Investors are watching closely,” he added. “They may start looking at markets where trade policies are more stable.”

Business voices echo alarm bells

Busi Mavuso, CEO of Business Leadership South Africa, said that while the delayed 30% tariff offers a sliver of time for negotiation, most companies are already preparing for the worst.

And with such sharp declines in vehicle exports already logged, there’s a concern that any rescue talks may come too late.

For now, Mercedes-Benz South Africa has not made a formal decision to exit. When asked for comment by BusinessTech, the company had not responded by the time of publication.

But the warning signs are there, and they’re not just symbolic. If the East London plant were to close, it would leave a deep scar on the provincial economy and send a worrying message to foreign investors across all sectors.

What’s happening isn’t just about tariffs or trade. It’s about whether global manufacturers still see South Africa as a viable home base. And if Mercedes-Benz leaves, it may not be the only one.