Volkswagen's investment announcement is a huge relief for South Africa's economy. Picture: Jaco van der Merwe
Volkswagen Group Africa confirmed its commitment to South Africa with the announcement of a R4 billion investment in the Kariega (formerly Uitenhage) assembly plant.
The news comes as a huge relief for the local economy. Less than five months ago, Volkswagen Passenger Cars CEO Thomas Schaefer warned the South African government to get its house in order. He said that the ongoing energy and logistical problems are making the country less and less viable for future investment.
The investment will be used to upgrade facilities in preparation of a third model to its production line-up from 2027. VW said last year that the model will be an SUV, but no further details have emerged since, especially in the light of Schaefer’s strong stance.
The SUV, will be manufactured alongside the VW Polo and Polo Vivo. Kariega will be the only facility to build the Polo once European production ends later this year.
“Plant Kariega is an important manufacturing plant within the Volkswagen Group production network,” said Martina Biene, Chairperson and Managing Director of Volkswagen Group Africa.
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“Since 2011, Volkswagen has invested R10.28b in production facilities, manufacturing equipment, local content tooling and training of people. The new investment is a vote of confidence in the future of the plant.
“It also futureproofs jobs, not only for our people but also those employed in our supplier network.”
R877 million will be spent to enhance automation in the Kariega plant’s body shop. A further R418m will be utilised to procure new press tooling in the press shop.
The first phase of the plant facility upgrade will begin at the end of 2024 during the plant shutdown.
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“South Africa is an important market for the Volkswagen Group. Particularly in terms of our long-term goal to establish our footprint on the African continent. It is seen as the last frontier for automotive development. As such, we have recently renamed our local company to Volkswagen Group Africa, to represent our steering responsibilities and ambitions to grow the Volkswagen brand on the continent,” added Biene.
“The new model has the potential to be sold in other African markets where Volkswagen has a presence.”
VW Brazil is leading the design and development of the new SUV. Volkswagen Group Africa’s Engineering team has collaborated with Volkswagen Brazil for the adaptation of the new model to the local and continental requirements.
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