DaimlerChrysler South Africa is expected to spend more than R1 billion in preparation for the new Mercedes-Benz C-Class model to be built at its East London plant.

Speaking from the Auto Africa show in Johannesburg, DCSA chairperson Christoph Köpke said the new C-Class, dubbed model number W204, will go into production in 2007.

He said the new model, which was confirmed for the plant here at the end of July this year, would be for domestic and export markets and would include left- and right-hand drive models.

DCSA currently only produces cars for right-hand drive markets, which excludes it from many lucrative northern hemisphere export markets, particularly the United States.

Producing both left- and right-hand drive models would allow DCSA to take advantage of the benefits provided by the US African Growth and Opportunity Act by exporting there - but Köpke would not say to which markets DCSA would be exporting the new model.

He added that the current capacity at the DCSA plant here would be increased from 45000 units a year to 80000.

"If production in East London reaches 80000 units, it would lead to an additional 800 jobs at the plant."

Köpke said that DCSA would also be encouraging between 10 and 14 new suppliers to establish manufacturing plants in South Africa.

He said the investment by these suppliers in South Africa "would create 3000 job opportunities at first-tier supplier level".