The affordable new VW crossover that will be built in South Africa

Volkswagen plans to build a new crossover in South Africa that will help it to compete with affordable imports from India and China.

For decades, VW has been one of the best-selling car brands in the country, thanks in no small part to its factory in Kariega, which has produced several popular models.

Today, it assembles two cars, the Polo and Polo Vivo hatchbacks, which are sold locally and exported to markets worldwide. Kariega is actually the only factory that still produces the Polo, as VW’s other sites have pivoted to focus on newer models like the brand’s ID. electric series.

However, while VW Group Africa (VWGA) still produces the Polo and its stripped-down, entry-level sibling, the Vivo, the brand has slowly been losing market share in South Africa.

The Vivo is still very popular thanks to its relatively affordable sticker of R271,900, but the regular Polo has seen a drop in interest due to its ever-rising price tag, which currently starts at R373,800.

VW’s other vehicles are even more expensive, as its cheapest SUV, the T-Cross, now starts at R399,900, while the Golf and Tiguan ask for R580,900 and R668,100.

This is at a time when motorists are struggling to keep up with the rising cost of living, leading to massive changes in buying habits.

Luxury German brands have seen a sharp decline in sales since the start of the decade, while sales of affordable cars built in China and India have taken off.

VW, which used to consistently be the second-best-selling car brand in South Africa, lost its crown to Suzuki, which has exploded in popularity due to its affordable catalogue.

Competitors like Chery, Haval, and Mahindra have also seen huge gains, with all three now among the top 10 best-selling brands.

To put things in perspective, you can buy a Chery Tiggo Cross for roughly the same price as a base-spec Polo Vivo. Alternatively, you can get a Haval Jolion or Omoda C5 for less than the price of a Polo.

VW has acknowledged that these vehicles are very competitively priced and that it needs to adapt its strategy to remain relevant in South Africa, which is why it plans to build a new car here.

VW’s answer to Chinese SUVs

Enter the VW Tera, a small crossover sold in Brazil that serves as the brand’s entry-level SUV, slotting below the T-Cross.

Last year, VWGA confirmed that it will add a new production line to its Eastern Cape factory to build the Tera with the goal of re-establishing its dominance in the sub-R400,000 segment.

The vehicle won’t be called the Tera when it goes on sale, mind you, as VW held a competition to select a local name for the car.

Four names were put to a vote – Tengo, Tavi, Tiva, and Tion – continuing the brand’s tradition of giving its SUVs a name that starts with T.

The winner was the Tengo, though it will still be a while before you see any VW Tengo models out on the road, as the vehicle is only scheduled to go into production in 2027.

VWGA hasn’t confirmed the crossover’s local specifications, but in Brazil, the Tera is fitted with a 1.0-litre engine.

The naturally aspirated units produce 56kW and 92Nm, but there’s also a turbocharged (TSI) option that has a different output depending on the gearbox.

The manual TSI generates 81kW and 165Nm, while the automatic has a slightly higher rating of 85kW and 170Nm.

Prices for the Tera start at around 107,000 BRL in Brazil, which directly converts to roughly R330,000 at the current exchange rate.

It would obviously be much more expensive if it were imported, but it remains to be seen how VWGA will price the Tengo in South Africa, given that it will be locally produced.

VW Tera in Brazil