Volkswagen deal offers hope for Eastern Cape as Mercedes-Benz considers South Africa exit

VOLKSWAGEN South Africa's (VWSA) recent agreement to become the sole global manufacturer of the VW Polo—producing both left and right-hand drive models for all markets—offers a beacon of hope for the struggling Eastern Cape Province.

- BANELE GININDZA

This announcement comes on the heels of alarming news from Mercedes-Benz South Africa (MBSA), which has indicated that the newly imposed 30% tariffs on exports to the United States may force the company to exit the country entirely.

During a briefing by the Eastern Cape and Northern Cape Provincial Treasuries, acting Premier Mlungusi Mvalo expressed grave concerns about the potential departure of MBSA.

Mvoko said Mercedes Benz had indicated that it would likely leave the country with the composition of the 30% tariffs, adding that this would be devastating for the province's economy.

The factory in East London plays a pivotal role in the province's economy, exporting nearly 90% of its vehicles to the US.

"You cannot imagine East London without Mercedez Benz. MBSA exports almost 90% of their cars to the US. In our interaction with MBSA, they have said that given these tariffs, it proves it will be difficult," Mvalo said.