VWSA to reach record production this year, says Schäfer

Volkswagen Group South Africa (VWSA) should this year produce a record number of vehicles at its Uitenhage plant, in the Eastern Cape, says CEO Thomas Schäfer.

He says the local arm of the German car manufacturer should produce 161 900 vehicles, of which 108 000 are scheduled to be exported.

VWSA produced 126 413 vehicles in 2018, and exported around 75 900 units. VWSA produces the Polo for the local market and export markets around the world, including Europe, as well as the Polo Vivo for the local and selected African markets.

“If we could produce more, we would, but we are maxed out. We are on three shifts (a day) and we are already working on Saturdays,” says Schäfer.

He regards 2018 as the “best year in VWSA’s existence”, with the Volkswagen brand grabbing a 19.8% share of the South African passenger car market. VWSA also sells Audi in South Africa.

Schäfer says VWSA was “profitable” and that it had “met and exceeded all targets” for 2018, despite the implementation of a third shift in April, which saw the addition of new, inexperienced staff to the payroll.

VWSA has also added the Polo GTI to its production roster – a model which used to be produced in Spain.

“It is a good problem to have to be maxed out,” says Schäfer.

Looking ahead, he regards 2019 as a year of two halves – before and after the national election in May, with the economy expected to gain somewhat better traction after the elections.

However, the potential of a protracted strike looms large within the local automotive industry, with vehicle manufacturers, component makers and trade unions back at the bargaining table this year to negotiate a new wage deal for the sector.

The National Union of Metalworkers of South Africa has “already said that the gloves are off, which I find strange in this economy,” notes Schäfer.

He says Numsa has indicated its desire for a double-digit wage increase, while inflation stands at 4.5%.

“It’s going to be interesting. It would be great not to have a strike, but we can’t afford 10%. We are pricing ourselves out of the market.”

With the Uitenhage plant currently operating at capacity, Schäfer acknowledges that it would be difficult for VWSA to stockpile vehicles in anticipation of a strike.