Mercedes in Talks to Share East London Plant With China’s GWM Amid US Tariff Pressure

Mercedes-Benz is considering a major shift in its South African operations: sharing its East London manufacturing plant with Chinese automaker Great Wall Motor (GWM) .

The move, confirmed by sources familiar with the matter, is aimed at strengthening the facility’s viability amid new US tariffs on car exports from South Africa.

The Talks

The companies are in discussions to co-manufacture vehicles at the Mercedes plant in East London, according to a Bloomberg report.

GWM representatives have submitted a proposal to South Africa’s Department of Trade, Industry and Competition, expressing interest in producing vehicles locally.

Neither company has confirmed a deal. Mercedes stated only that it “strives to ensure all production sites remain globally competitive.” GWM noted it is “investigating ways to expand in the local market.”

No agreement has been finalised. Alternative arrangements are possible, including using the plant as a hub to repurpose end-of-life passenger vehicle batteries.

The Pressure

The East London facility has shipped C-Class sedans to the US since 1997 under the African Growth and Opportunity Act (AGOA) , benefiting from duty-free exports.

But tariff changesincluding a 15% US levy starting this monthhave put significant pressure on the plant’s economics.

The factory was modernised in 2022 at a cost of €600 million (R11.5 billion) and employs around 2,400 workers.

The Logic

Sharing the facility could:

• Reduce overcapacity

• Lower operating costs

• Help preserve jobs as local production drops

Currently, only one in three cars sold in South Africa is made domestically.

For GWM, a local production line would meet growing demand for its Haval and Tank brands.

For Mercedes, accommodating another brand would require minimal changesaside from a separate body shop for welding and assembly.

The Bottom Line

Tariffs are forcing automakers to rethink their global footprints.

For Mercedes’ East London plant, sharing with GWM could be the difference between survival and closure. For South Africa, it could mean keeping 2,400 jobsand a vital industrial assetalive.

The talks are ongoing. The stakes couldn’t be higher.