Volkswagen To Invest R4.5b At Its South African Plant By 2017

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Volkswagen has announced plans to invest an estimated R4.5 billion in capacity building and plant in South Africa.

Thomas Schaefer, Managing Director of Volkswagen Group South Africa (VWSA) announced the next phase of major new investments in the factory in Uitenhage, its supplier base and the training of employees for the next generation of products to be manufactured in South Africa.

UD News reports that the estimated R4.5 billion investment includes over R3 billion in production facilities and quality, around R1.5 billion in local supplier capacity and a further estimated R22 million for the development and training of employees.

This will be the first time that a version of the Modular Transverse Matrix platform will be utilised in South Africa featuring the latest technologies and driver assistance systems. This will be built for both the local and export markets. Further details will become available once VWSA announces which new models will be produced at the Uitenhage plant.

Between 2007 and 2014 VWSA invested some R5.9 billion in South Africa; this was for the current generation Polo and Polo Vivo as well as plant and infrastructure.

The Polo is also produced for exports and some 66 000 4-door Polo’s are expected to be exported to mostly right hand drive markets in 2015, a 21% increase over 2014. The current localisation level is around 72% and the new models are expected to have an even higher level of local content.

Schaefer also used the opportunity to update the media on various aspects of the motor industry and VWSA’s performance in the local market.

“South Africa is not a logical production location for the motor industry as only 0.6% of the world’s vehicle production is situated here, said Schaefer.

“However owing to the strategic location and the potential of Africa as a future market for exports, as well as the security that the APDP provides for investors, on-going investment in our vehicle manufacturing base makes sense.

“Hence the decision by our parent company to allow us to embark on such a major new investment. Exports will again play a key role in our strategy going forward.

“We are very grateful to the Board in Germany for this vote of confidence in our country, management and employees and we will ensure that we deliver on our commitments.”

Volkswagen Group South Africa has dominated the passenger market for the last five years and continues to do so in 2015 with a year-to-date market share of 21.4%.

“On-going investment in new technologies and products will ensure that Volkswagen is positioned to continue to be the dominant player in the South African passenger market.” concluded Schaefer.

The Polo Vivo and Polo have been the number one and two sellers respectively in the local market since they both were launched in early 2010.


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