Volkswagen blames load shedding for poor February sales

Volkswagen South Africa has attributed its recent poor vehicle sales figures to load shedding that has significantly hobbled production of the Polo and Polo Vivo at its Kariega Plant in the Eastern Cape.

Earlier this week, the National Association of Automobile Manufacturers of South Africa (NAAMSA) revealed that the country’s automotive sector had posted its 14th straight month of sales increases with an uptake of 2.6% from 44 224 unit sales last year, to 45 352 this year.

Polo slump

Matters have not been as plain sailing for Volkswagen though, who recorded total sales of 5 288 units and exports of 7 778 from the facility located in Nelson Mandela Bay, formerly known as Uitenhage.

While the 1 513 Polo Vivo sold listed it as Wolfsburg’s best-selling vehicle for the month, the Polo, which accounts for the majority of exports to 38 markets, only mustered 813 domestic market sales that saw it drop out of the top 10 for the first time in months.

In an interview with radio station Algoa FM this past Wednesday (1 March), Volkswagen South Africa Managing Director, Martina Biene, said the automaker’s production numbers fell by 30 000 units last year as a result of the various stages of power cuts implemented by Eskom.

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Biene, who returned to South Africa last year to head-up Volkswagen South Africa in a swapping of roles with former head Robert Cisek, who has returned to Germany to lead the manufacturer’s Small and Compact Products portfolio, said power interruptions, the town’s dilapidated infrastructure and ongoing water crisis had been a feature of her 100 days in office that seemingly shows no sign of improving.

Markets share gone

“We lost market share because we were short in supply [and as a result] we built 30 000 fewer vehicles at our plan than we could. So, the focus area is to gain back our market share in South Africa,” Biene said.

She added that Volkswagen, together with the Nelson Mandela Business Chamber (NMBBC), has lobbied for the introduction of a 24-hour load shedding period instead of the daily power cuts in order for production to continue.

“We lose a lot of units when we ramp down, then we stand still, and then ramp up again but then we also lose. So it’s better not to ramp up and ramp down a lot,” she said.

Business chamber worrying

In a statement in January, NMBBC President, Loyiso Dotwana, said the impact of the then introduced stage six blackouts has been such that “one manufacturer, a critical supplier into the automotive industry, had not yet managed to start up production at all, due to the high levels of load shedding”.

“The head office of another [plant] has called it a day, planning to close its plant and move operations out of South Africa by the end of the year, with accompanying job losses,” he said.

“Whether for reasons of transitioning to a low carbon future, increasingly high tariffs or the need for business continuity with uninterrupted power supply, it is clear that the days of relying solely on Eskom and municipalities for power are gone forever.”

South Africa’s Detroit

Known for years as the “Detroit of South Africa” in reference to the city that housed all of the Big Three United States automakers, Ford, General Motors and Chrysler, the latter now known as Stellantis, current vehicle production taking place in Nelson Mandela Bay includes that of the Polo and Polo Vivo, the Isuzu D-Max and engines for the Ford Ranger.

Besides several component manufactures, tyre producer Goodyear operates from Kariega directly beside the Volkswagen plant, while Continental and General Tire manufacturing occurs in Port Elizabeth, now known as Gqeberha.

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