TRALAC - Trade Law Centre

South Africa: Mercedes Hopes for AGOA Benefits on Exports to US

Thursday, 30 March 2006

Source: Business Day (South Africa)

Daimler Chrysler SA, which yesterday reported record revenues of R27,5bn for last year, will become the second car maker in SA to export to the US if it qualifies for benefits under that country’s Africa Growth and Opportunity Act (AGOA).

US customs authorities will make a ruling in the next three or four weeks on whether local content in the Mercedes Benz C-Class that the car maker is looking to sell in the US is sufficient under Agoa criteria to qualify for lower import duties.

This did not necessarily mean that the car maker would increase production volumes in SA, head of manufacturing Joachim Follmann said, “...but I’m convinced this will happen”.

Exports with 35% local content qualify for lower or zero import duties under Agoa. Follmann said the definition and interpretation of local content differed.

BMW is expected to export more than 20000 cars to the US from SA this year.

DaimlerChrysler SA’s attempts to export to the US form part of planning for the start of production of the next C-Class model at its East London plant late next year.

DaimlerChrysler SA, which produces 200 cars a day, is investing €200m to prepare its own and supplier plants for the new model.

The car maker also announced yesterday it would start assembling buses in SA, ahead of expectations that the bus market will boom.

Head of sales and marketing Fritz van Olst said the bus market of 700-800 units a year was far too low, given the country’s transport challenges. He said the 2010 Soccer World Cup might be the catalyst prompting larger bus sales.

DaimlerChrysler said yesterday it recorded the highest passenger cars and truck sales in a single year last year, amid the booming domestic vehicle market.

Chairman Hansgeorg Niefer said revenue rose more than 11% to an all time record. Revenue was R8,5bn only five years ago.

The local DaimlerChrysler operation outperformed the multinational group, which recorded a 5% increase to €149,8bn in the 2005 financial year. Total vehicles sales were up 3% to 4,8-million units.

Niefer underscored DaimlerChrysler SA and other car makers’ concerns about government support through the Motor Industry Development Programme (MIDP) and beyond its expiry in 2012.

In its budget vote presentation to Parliament yesterday, the trade and industry department sent a reassuring signal to the car industry, saying it would continue to support it.

Deputy Minister Rob Davies said a review of the MIDP would be finalised “in a matter of the next few months”.

Davies said the automotive industry had displayed impressive performance by creating jobs, attracting investment, growing exports and integrating the domestic industry into global manufacturing operations.



“ Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of South Africa’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.