Volkswagen has announced a fresh R4-billion investment in its South African operations, chiefly to manufacture a new small SUV at Kariega from 2027…
Volkswagen has announced a fresh R4-billion investment in its Kariega facility in the Eastern Cape, which is set to start producing a new small SUV from 2027. The as-yet-unrevealed model is expected to be sold in South Africa as well as exported to other African markets.
VW says the investment will see the facility upgraded in “various areas in preparation for the addition of a 3rd model to its production line-up from 2027”, with the first phase of the upgrade set to begin “at the end of 2024 during the plant shutdown”.
According to the German automaker, most of the R4-billion investment will be allocated to “capital expenditure for production facilities, manufacturing tooling, local content tooling and quality assurance”, with nearly R877-million set to be spent on enhancing automation in the body shop. An estimated R418-million, meanwhile, will be used to procure new press tooling.
In addition, Volkswagen Group Africa confirmed that its Kariega factory will become the sole manufacturer of the Polo hatchback worldwide from July 2024. As a reminder, the plant also produces the prolonged-lifecycle Polo Vivo hatch for the local market. The new model will be manufactured on the same production line as the Polo and Polo Vivo.
Martina Biene, Volkswagen Group Africa Chairperson and Managing Director, made the investment announcement at an event attended by various officials, including Minister of Trade and Industry Ebrahim Patel, Eastern Cape Premier Lubabalo Oscar Mabuyane and German Ambassador Andreas Peschke.
“Plant Kariega is an important manufacturing plant within the Volkswagen Group production network. Since 2011, Volkswagen has invested R10.28-billion in production facilities, manufacturing equipment, local content tooling and training of people. The new investment is a vote of confidence in the future of the plant. It also futureproofs jobs, not only for our people but also those employed in our supplier network,” explained Biene.
The investment announcement serves as a long-awaited confirmation of the new model, with VW having revealed its plans to add a 3rd product to its local production line back in November 2022. The still-mystery 3rd model will ride on the same MQB-A0 platform as the Polo and numerous other VW Group products, but is set to be positioned below the imported T-Cross.
Volkswagen says the brand’s Brazilian division is “leading the design and development of the new SUV”, though adds that VW Group Africa’s engineering team “has collaborated with Volkswagen Brazil for the adaptation of the new model to the local and continental requirements”.
In 2022, Biene emphasised the upcoming model would not function as “a replacement for the Polo”. Instead, it looks likely to fill some of the production capacity that will likely be lost once key European markets phase out combustion engines and Polo hatchback exports from Kariega to the Old Continent decline.
“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,” Biene said, before confirming an ID.4 “test fleet” will be introduced locally later this year.
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