Volkswagen SA (VWSA) is to build a new vehicle at its Eastern Cape assembly plant, to reduce export dependence on its Polo car range.
The new product, probably an SUV, will be aimed primarily at SA and other African markets.
Most Polos built at the company’s Eastern Cape assembly plant go to the UK and EU, where cars with petrol and diesel internal combustion engines (ICE) will be banned in the next few years as markets shift to electric vehicles (EVs).
Announcing the plan on Thursday, Thomas Schaefer, the former VWSA MD who is now global CEO of the VW car brand, said the company was overreliant on its European business.
“If it starts to shrink, we will be in big trouble.”
It made sense to build a vehicle aimed at African customers.
In addition to Polo, VWSA builds the Vivo, based on the previous-generation Polo and sold mainly in SA.
Martina Biene, who became VWSA MD on November 1, said the next generations of Polo and Vivo would be built at the Kariega (formerly Uitenhage) plant after 2025, when the current models’ life cycle ends.
The likely new vehicle, which she said was a new model in the global VW portfolio, would be built alongside them. Schaefer said the final decision, along with the likely scale of investment, would be decided in Germany “in the next four or five weeks”.
VWSA started building Polos in 1996 and exporting them in 2002. In May, Kariega produced its 1-millionth export Polo.
Current Polo and Vivo cars made in SA are ICEs. The UK proposes banning sales of new ICE vehicles from 2030, and the EU from 2035. A 2025 launch of the new Polo would keep it in production until 2032.
Biene said EVs would eventually be manufactured by VWSA, but it might only be “by the middle of the next decade”.
She was not sure when VWSA might start to import EVs but sales and marketing director Thomas Milz said recently it was unlikely to be before 2024.
VWSA has been talking for some years about a third local model. Schaefer said the change was driven by the rapidly growing popularity of SUVs in African markets. “Long term, you have to change the business model,” he said. “Let’s make something for Africa rather than ship it around the world. You need to build it where you sell it.”
Biene said Kariega had capacity to build 160,000 vehicles annually. It was possible to increase that, but it might not be necessary. “There might be less exports to Europe and we can fill that capacity with vehicles for the local market.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.