Clean fuel policy crucial for the survival of South Africa’s automotive industry

Despite all the headwinds we have had to contend with in the first two months of this year, I retain my sense of confidence.

I can’t say unbridled optimism, because of the unresolved problems that we continue to face in South Africa, but I am positive about the prospects that this year holds.

With the minor glitch of the thankfully brief return of load shedding, we dare not forget that we had enjoyed almost a year of uninterrupted power.

The government of national unity has brought stability to an unprecedented situation and it is to the credit of all the parties for the speed with which they ventured into the unknown and formed a government.

My home country faced the same situation last month and I am grateful, too, that Germans were able to choose a chancellor as quickly as South Africans elected their president.

Stability is vital for investor confidence and this has been boosted by the interest rate cuts we have enjoyed.

There has been progress on implementing the south corridor, allowing us to transport the vehicles we make to Gauteng as well as the Kariega to Port corridor in Nelson Mandela Bay.

But there are also commitments that need to be met soon, such as the implementation of the department of mineral resources and energy’s Clean Fuels 2 programme, limiting petrol and diesel sales to below 10ppm sulphur content, which is due to be implemented by July 2027.

If there is no cleaner fuel then, we will be signing the death knell for the South African automotive industry.

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We cannot bring vehicles powered by cleaner internal combustion engines if we do not have the fuel to run them.

This, in turn, starts to influence the kind of vehicles we produce as SA-based manufacturers because the entire automotive production development programme is predicated on building for export.

Last year, we broke all production records manufacturing 167 085 vehicles in Kariega.

We did so well that our parent company in Wolfsburg, Germany, made us the sole manufacturers of the Polo and Polo Vivo models for its global right-hand drive markets and approved R4 billion investment for us to build another model in South Africa, with production slated for 2027.

The bad news is that 2025 won’t be another record-breaking production year because we will have to take part of the plant offline from the middle of April to the middle of May to install and programme the more than 100 robots we will be using.

The good news is that it ensures the continued longevity of a manufacturing operation that has been in Kariega since the first VW Beetle rolled off the production line in 1951.

It means that we will create more jobs directly – and indirectly through our component suppliers.

The Vivo has become a testament to South African ingenuity and aptitude.

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It truly is a proudly South African car, engineered and built here and made up of 76% local content.

It has a four-star global New Car Assessment Programme rating and is one of the safest cars in the segment.

Building local means more than cars for us.

It means putting in 3MW of solar PV panels that we promised last year and pledging to erect 2.1MW this year, even though we believe Eskom has turned the corner.

We want to become a carbonneutral plant by 2030 and we are proud of winning the Zero Impact Factory Award on top of being named best South African employer of the year for the 14th consecutive time.

Living and working in Nelson Mandela Bay is a privilege that we are proud of and a responsibility we hold close to our hearts.

The area is water-stressed and we have made major strides in developing new technology to reduce our water consumption.

We’ve developed our own racing talent, with Jonathan Mogotsi winning the Polo SupaCup last year after being runner-up so many times.

We are looking forward to breaking more records this year, but the most important of all is to keep on contributing to this country and developing new, world-beating technology.

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