Mercedes-Benz and Great Wall Share South African Plant to Counter Tariff Pressure

To address U.S. tariff hikes and evolving local policies in South Africa, Mercedes-Benz and Great Wall Motor are in talks to share a factory in East London, South Africa. The plant’s exports to the U.S. have plummeted by over 80% following Washington’s imposition of a 30% tariff on South African goods, leaving its capacity utilization at just 12% and resulting in annual losses exceeding €90 million. Meanwhile, Great Wall faces mounting pressure from China’s planned increase in import tariffs on complete vehicles—from 25% to 50% starting in 2026—making local production credentials urgently needed. The two companies are considering a “retained ownership, outsourced operations” model: Mercedes-Benz would retain asset ownership and maintain control over quality systems, while Great Wall would pay contract manufacturing fees and bear variable costs. This arrangement would allow Great Wall to quickly obtain local manufacturing status to circumvent high tariffs, shortening its payback period to within 18 months. For Mercedes-Benz, it would boost capacity utilization and reduce losses. The partnership could establish a new low-risk, win-win paradigm for multinational automakers navigating trade barriers—and may be replicated in markets such as Southeast Asia and Latin America.