R4 billion upgrade for VW’s factory in South Africa

Volkswagen is celebrating its 75th year of operations in South Africa and is preparing to upgrade its factory to add a brand-new vehicle to the assembly line.

The German carmaker has a manufacturing facility in Kariega (formerly Uitenhage) in the Eastern Cape, which has produced many different cars over the decades.

Uitenhage, a small industrial town, was established back in 1804 and later became the home of the Volkswagen Group Africa, which produced its first car, a Beetle, at its factory in 1951.

The factory originally belonged to the South African Motor Assemblers and Distributors (SAMAD), and the assembly line also featured Studebaker and Austin models.

The first Beetle rolled off the production queue on 31 August 1951, and the vehicle went on to become an icon for South African motorists.

This was later followed by the Type 2, better known as the Kombi, in 1955, helping to secure VW’s position as a top-selling brand.

In 1965, Volkswagenwerk in Germany bought a controlling share in the factory, which was their first plant outside of the fatherland.

SAMAD’s factory was then renamed Volkswagen of South Africa in 1966. In 1974, the site became a wholly-owned subsidiary of VW AG.

Over the years, more than 40 different models have been produced at Kariega, including the Beetle, Kombi, Golf, Audi, Citi Golf, and Jetta.

Today, it makes the Polo and Polo Vivo and is, in fact, the only site in the world that still produces the hatchbacks for the local market and exports, as VW’s other factories have pivoted to other models like the ID. electric series.

Over 4.8 million cars have been produced at the site, of which more than 3 million were made for South Africa.

VW has also played an active role in community projects in South Africa, having invested more than R800 million since 1994 via the VW Community Trust and other partnerships.

President Cyril Ramaphosa attended a gala event celebrating the carmaker’s 75th anniversary, where he delivered the keynote address.

“Like me, many South Africans carry memories of the place of Volkswagen cars in their lives,” the President said.

“This brand is so woven into our culture that we sometimes have to remind ourselves that Volkswagen is not a South African vehicle.”

“Volkswagen has never been content simply to do business in South Africa. It has sought to become part of the fabric of our nation. We celebrate this proud history. We celebrate generations of Volkswagen employees who have built this company.”

“We celebrate the suppliers, dealers, organised labour and communities that have been part of this journey, and we celebrate the contribution that Volkswagen has made to Kariega, Nelson Mandela Bay, the Eastern Cape and the South African economy.”

VW to build a new crossover at its South African factory

The company, which officially rebranded as Volkswagen Group Africa (VWGA) in 2025, plans to capitalize on its position as the sole Polo producer in the world by expanding into other African markets.

VW will also add a third vehicle, the entry-level Tengo crossover, to the production line to widen its selection of affordable models to better compete with Indian and Chinese imports.

To do so, VWGA is investing R4 billion into its factory to upgrade its assembly to accommodate a third model.

“We are greatly encouraged by Volkswagen’s continued investment in our country. We particularly welcome the R4 billion investment associated with the introduction of the new VW Tengo,” said Ramaphosa.

“It is a vote of confidence in our workers. It is a vote of confidence in our manufacturing capability. And it is a vote of confidence in South Africa as an investment destination.”

The president noted that the automotive industry is one of the country’s largest manufacturing sectors and a major driver of employment, supporting over 115,000 direct jobs and half a million jobs across the broader supply chain.

“Our roots run deep in this town and in the Eastern Cape, and from this foundation we intend to build a future for Volkswagen across the African continent,” said Martina Biene, VWGA Chairperson and Managing Director.

“Kariega has secured its place in the Volkswagen world over the past 75 years,” said Thomas Schaefer, CEO of the Volkswagen brand globally, and former Managing Director of Volkswagen Group South Africa.

“Generations of employees have built vehicles here that have won the trust of customers in South Africa and far beyond. The plant stands for quality, competitiveness and a clear commitment to performance.”