2,400 jobs at stake: why East London's Mercedes-Benz plant is at risk
Mercedes-Benz hasn't decided the future of its East London plant, which employs about 2,400 people and drives a quarter of the city's economy, after US tariffs and SA's AGOA exclusion.
East London's biggest employer is under pressure. Mercedes-Benz South Africa (MBSA) has not decided the future of its East London plant, and industry leaders warn the city could become a ghost town if production stops (BusinessTech).
Why is the Mercedes-Benz plant in East London at risk?
The plant builds the C-Class sedan and has historically sent most of it to the United States. A 30% US tariff on South African imports in 2025 made those cars far less competitive, and South Africa has now also been excluded from the African Growth and Opportunity Act (AGOA), the trade deal that gave SA goods cheaper access to the US market (BusinessTech).
Mercedes-Benz is also rethinking where it builds cars globally as it shifts toward luxury models and SUVs, and it has reportedly considered bringing another manufacturer into the East London factory to share costs. No final decision has been announced (BusinessTech).
How many jobs depend on it?
| Figure | Number |
|---|---|
| People employed at the plant | About 2,400 |
| Vehicles built in 2024 | About 70,000 |
| Share of East London's economy (MBSA and suppliers) | About 25% |
| Investment in upgrading the plant in 2022 | About €600 million |
| Producing cars in East London since | 1962 |
Source: BusinessTech
Because suppliers and local businesses lean on the factory, a cut in production would hit far more people than the 2,400 on its payroll.
How badly have car exports to the US fallen?
| Export | 2024 | 2025 | Change |
|---|---|---|---|
| All automotive exports to the US | R28.67 billion | R20.43 billion | Down 29% |
| Light vehicles | R16.57 billion | Down 31.7% | |
| Components | R3.86 billion | Down 12.8% |
Source: BusinessTech
Component makers' body NAACAM says 15 companies have closed and more than 7,500 gross jobs have been lost among its members in three years (BusinessTech).
What are industry and government saying?
Naamsa chief executive Mikel Mabasa warned that East London "could potentially face the burden of being classified as a ghost town" if the plant halted. Acting Eastern Cape Premier Mlungisi Mvoko said MBSA exports almost 90% of its cars to the US, and that the company told the province the tariffs would make things difficult (BusinessTech).
NAACAM's Renai Moothilal said the direct cost of losing AGOA is small next to the tariffs already in place, but that every percentage point counts in a global industry. Business Unity South Africa said the loss of preferential access could affect several thousand jobs, mainly in farming and car manufacturing (BusinessTech).
What happens next?
Nothing has been announced yet. Any decision on the plant's future would come from Mercedes-Benz itself, so watch for an official statement from MBSA rather than social media rumours.
FAQ
Is the Mercedes-Benz East London plant closing?
No closure has been announced. Mercedes-Benz has not made a final decision on the plant's future.
How many people work at the Mercedes-Benz plant in East London?
About 2,400 people, and MBSA and its suppliers make up an estimated 25% of East London's economy.
Why is the plant under pressure?
A 30% US tariff on SA imports from 2025, SA's exclusion from AGOA, and Mercedes-Benz shifting global production toward luxury models and SUVs.