If a plant-sharing agreement is reached, it could help Mercedes alleviate excess capacity while giving GWM local production access for its Haval and Tank brands in South Africa. Mercedes-Benz Group is considering sharing its manufacturing plant in East London, South Africa, with Great Wall Motor (GWM) in an effort to ease excess capacity and mitigate the impact of U.S. trade tariffs, Bloomberg reported, citing people familiar with the matter. According to the sources, the two companies have held preliminary discussions regarding potential joint production. GWM had previously submitted a proposal to senior officials at South Africa’s Department of Trade, Industry and Competition expressing its intention to produce vehicles locally. However, the discussions remain non-public and it is unclear whether a partnership will ultimately be reached. The companies may also explore other forms of cooperation. The East London plant has long served as a key production base for Mercedes-Benz’s export operations. Since 1997, the facility has primarily produced the C-Class sedan for export to the United States. Previously, South African vehicles could enter the U.S. market duty-free under the African Growth and Opportunity Act (AGOA). However, the U.S. government imposed a 30% tariff on South African goods last August, directly undermining the plant’s profitability. Although the U.S. Supreme Court suspended the tariff policy in February this year, the Trump administration plans to impose a uniform 15% tariff on goods imported into the United States starting this month, leaving the plant facing continued trade uncertainty. To maintain operations, Mercedes-Benz is evaluating multiple adjustment plans. According to people familiar with the matter, the company is also considering transforming the East London facility into a battery recycling center for processing and reusing end-of-life passenger vehicle batteries. Mercedes-Benz East London Plant Public information shows that Mercedes-Benz invested about €600 million ($694 million) to upgrade the East London plant in 2022. The facility currently employs about 2,400 workers. If a plant-sharing agreement is reached, it could help alleviate excess capacity and stabilize local employment. For GWM, establishing local production capacity in South Africa would help meet growing demand for its Haval and Tank brands in the country and further expand its market share. In response to the reports, Mercedes-Benz South Africa said the company is committed to maintaining the competitiveness of its global production network and will adjust operating models when necessary, but declined to comment on specific negotiations. GWM South Africa said it is continuously exploring ways to expand its local market presence but did not disclose further details.