Following VW’s recent R4 billion upgrade at its Kariega plant in the Eastern Cape, President Cyril Ramaphosa has encouraged other car manufacturers to follow suit and invest in South Africa.
Addressing the Polo builder’s event celebrating 75 years of manufacturing vehicles in South Africa, the President called the local automotive sector one of the country’s most important.
“It supports more than 115,000 direct manufacturing jobs and more than half a million jobs across the automotive value chain,” he said.
“The industry accounts for just over 5% of our gross domestic product and reaches 155 export destinations.”
Vehicles manufactured and assembled in local factories are shipped to markets across Europe, the United Kingdom, the United States, and the rest of Africa.
As a result, the automotive industry plays a vital role in the local manufacturing sector and holds the key to the government’s efforts to grow the economy, expand exports, attract investment and create jobs.
Ramaphosa welcomed VW’s latest investment, calling it a vote of confidence in local manufacturing capabilities and in South Africa as an investment destination.
“In an intensely competitive environment, South Africa must continue to demonstrate that we have the capabilities, the skills and the policy environment required to attract these investments,” said the President.
He added that while the automotive industry transitions towards electrified vehicles, the country can take advantage of the new opportunities since its manufacturing base is already in place.
“We are determined to ensure that South Africa remains an important global manufacturing base for the vehicles of the future,” said Ramaphosa.
“Government is working to ensure that there is a stable, predictable and supportive policy environment in which automotive companies can invest, localise and grow.”
The government is reviewing the Automotive Masterplan to ensure it responds to changing industry conditions and increases local vehicle production.
The President noted that South Africa wants more vehicles sold in the country to be built locally in their entirety, and not merely assembled.
“We must increasingly manufacture the components, process the materials and develop the skills and technologies that go into them,” he said.
VW’s factory to build a third model soon
Since 1951, close to five million VW vehicles across 40 different models have been built at Kariega, including the Beetle, Kombi, Golf, Jetta, Citi Golf, and today every Polo and Polo Vivo shipped worldwide.
“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.”
Soon, the Polo and Vivo production lines will be joined by an affordable, entry-level crossover SUV – the Tengo – thanks to VW’s latest investment.
Introducing the new model will add greater variety to the German brand’s local stable, while also warding off competition from cheaper Indian and Chinese imports.
The crossover is already on sale in markets like Brazil, where it is called the Tera, and serves as the brand’s entry-level SUV offering, slotting below the T-Cross in the VW line-up.
In that market, the vehicle is sold with a naturally aspirated 1.0-litre petrol motor producing 56kW and 92Nm, and a turbocharged option that makes 81kW and 165Nm in a manual, and 85kW and 170Nm in an automatic.
The Tera sells for under R400,000 in Brazil, but since no local specifications or pricing have been announced, we will have to wait for VW to confirm these, with the vehicle only entering production next year.
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