Volkswagen Group Africa has announced a substantial investment of R4 billion into its manufacturing facility located in Kariega, Eastern Cape.
This investment is geared towards upgrading existing facilities in anticipation of introducing a third model to its production line by 2027.
A significant portion of the R4 billion will be allocated towards enhancing production facilities, acquiring manufacturing and local content tooling, as well as ensuring quality assurance measures.
In excess of R850 million will be dedicated to automating processes in the Body Shop, while an additional over R400 million will be utilised in the Press Shop for procuring new press tooling.
The initial phase of this upgrade is slated to commence by the year's end, coinciding with a plant shutdown.
Martina Biene, chairperson and Managing Director of Volkswagen Group Africa stressed the importance of Kariega within the Volkswagen Group's manufacturing network. She said that since 2011, Volkswagen has already invested R10.28 billion in various aspects of production facilities, equipment, local content tooling, and workforce training.
The latest investment underscores confidence in the plant's future viability and aims to secure jobs not only within Volkswagen but also among its supplier network, the company lead said.
Regarding the new development, Volkswagen Group Africa plans to introduce a new SUV model, manufactured alongside the existing Polo and Polo Vivo lines.
Biene told to Cars.co.za that production of the vehicle would likely commence in 2026 or “probably 2027”.
She said it would position below the T-Cross – and that it was dubbed the “A0 Entry SUV” internally – being similar in size to that model but offered at a lower price point.
Biene furthermore revealed the vehicle “we are looking at is kind of in partnership with Brazil”, adding many Latin American countries have similar market demands to that of South Africa.
The preparations for this SUV's production will include training and upskilling initiatives for Volkswagen Group's employees.
While the design and development of the new SUV are led by Volkswagen Brazil, Volkswagen SA is collaborating closely with the Brazilian team to ensure compliance with local and continental requirements, including the development of a right-hand drive version.
Despite the global trend towards electric vehicles, Volkswagen anticipates a slower adoption rate in Africa compared to other regions, reaffirming its commitment to traditional combustion engine vehicles for the foreseeable future.
“As most global vehicle markets transition to electric vehicles, African markets like South Africa will continue manufacturing and selling vehicles with internal combustion engines (ICEs) for the foreseeable future, owing to customer demand for ICEs and slow introduction of electric vehicles in these markets.”
“However, for the Volkswagen brand the electrification journey begins this year with the introduction of our ID.4 test fleet in South Africa and Rwanda.”
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