Mercedes-Benz is set to produce the next generation of its C-Class cars in East London, an investment that will include a R10bn expansion of its current auto plant there.
The announcement was made in East London on Tuesday.
The German auto maker will be building a new paint shop, a new body shop and new new logistic warehouses, and will upgrade its assembly plant.
"The decision to have the new generation of the C-Class built in East London re-affirms the plant and Mercedes-Benz South Africa," said Mercedes-Benz executive Markus Schäfer in a statement.
"The investment is also a sign of our commitment to South Africa and efforts to revive economic growth, as well as the socio-economic development of the East London region," he said.
The upgrades, set to modernise the plant, include what Mercedes-Benz refers to as 500 'Internet of Things'-ready robots, as well as a push towards energy efficiency. (The 'Internet of Things' allows everyday objects to send and receive data by embedding computing devices within them.)
"Overall, the energy consumption per produced vehicle will be further reduced with 25% in the East London plant. This is in line with the plants initiative for a green production," said the auto maker.
President Cyril Ramaphosa, visiting the Mercedez-Benz plant on Tuesday, said the investment would help improve the lives of South Africans, according to his prepared remarks.
"We say this is an investment in people because it creates and sustains employment. We know that employment is the most direct and sustainable way to tackle poverty and inequality," he said.
Ramaphosa said the investment was a "firm statement of confidence in the country and its economy".
"It is a statement about the skills that are available in South Africa and those that can be developed."
The president has been on a drive to woo foreign investors to South Africa, since succeeding Jacob Zuma in February 2018.
In April he announced South Africa would host a major investment conference in August or September 2018, which would aim to raise over R1trn in new investments over five years.
"[Mercedes-Benz] has made an investment in the people of this country. Where it has led, we expect many other companies to follow," he said.
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER