VWSA to invest R4.5 billion in South African plant

The automaker plans to introduce up to three – as yet unnamed – models to its Uitenhage-based factory by 2017.

Thomas Schaefer, Managing Director of Volkswagen Group South Africa (VWSA), has 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, at a recent media briefing.

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 (MQB*) 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.


An aerial view of the VWSA 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.

Mr 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 Mr Schaefer. “However due 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 investments 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,” added Mr Schaefer.

“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 Mr Schaefer.

Official statement from Volkswagen Group South Africa on irregularities
There has been extensive international media coverage relating to irregularities in Nitrogen oxide emission values measured during‎ dynamometer regarding the emission standard Euro 5 of Volkswagen diesel vehicles fitted with the type EA189 Euro 5 engines.

In South Africa the compliance standard is EU 2. All Volkswagen Group diesel vehicles of the type EA 189 retailed in South Africa, that is, Volkswagen passenger, Audi, Light and Medium Commercial Vehicles comply with this standard for Nitrogen oxide emissions.


The VW Polo assembly plant

We want to further confirm that the bench mode in the software does not affect negatively the CO2 values. Our vehicles accordingly comply with the published CO2 values. Furthermore they are technically safe and roadworthy.

We would like to apologise to our customers for any uncertainty that may have been created over this issue and want to assure our valued customers, that their vehicles meet all the legal requirements in terms of which the National Regulator approved the sale for use in South Africa.

There is therefore no action required on either the part of the customer or our dealers.