Transnet CEO Brian Molefe says the State-owned freight logistics group is in talks with luxury car manufacturers Mercedes-Benz and BMW on a new transport plan that could increase the number of vehicles transported domestically by rail.

Currently, vehicles produced at Mercedes-Benz South Africa’s East London facility, in the Eastern Cape, are either driven directly onto ships for sale in markets abroad, or trucked to the main domestic market of Gauteng.

Speaking at the Gordon Institute of Business Science on Thursday, Molefe said Transnet was in discussions that could result in locally produced C-Class cars being transported to Gauteng by rail.

However, the plan hinges on BMW agreeing to use the return leg to East London to transport the 3-Series car, made in Rosslyn, north of Pretoria, and for the two German car producers to agree to share facilities at the East London car terminal.

Notwithstanding the distances involved, Molefe said BMW was currently using a terminal at Cape Town harbour to export its cars.

Beside the East London deal, Transnet plans to materially increase the number of vehicles transported by rail by 338% over the coming seven years.

In 2011/12, some 148 000 vehicles were transported by Transnet Freight Rail.

But the target under its R300-billion market demand strategy is to be railing 648 000 cars by yearly by 2018/19.

Reported by Engineering News