The head of Volkswagen Group Africa has called on government to protect local manufacturing from the “flood” of new Chinese brands entering the market…
Volkswagen Group Africa’s boss has called on the South African government to “protect and support” local automotive manufacturing as more and more new Chinese brands “flood” the market.
The German firm, which builds the Polo hatchback and Polo Vivo at its Kariega facility in the Eastern Cape, will add a 3rd product (in the form of an as-yet-unrevealed small SUV known as the Tera in Brazil) to the production line in early 2027, following a R4-billion investment.
At Naamsa’s South African Auto Week 2024 in Cape Town, we asked Martina Biene, Chairperson and Managing Director of Volkswagen Group Africa, for her thoughts on the stream of new Chinese brands entering the local market.
“Competition per se, I find it a good thing. It kind of evolves technology and it’s also a bit fun in the industry – no matter from where they come. When it becomes concerning is if the local manufacturers are, for some reason, not able to meet price points import competition can,” she told Cars.co.za.
“And it’s, I think, not because we are earning a hell of a lot of money. My R130-million I’ll have to invest into generators is an example,” Biene said, referring to the significant outlay VW Group Africa, as a local manufacturer, has had to make at its Kariega facility to mitigate the effects of load-shedding.
“Or a very low-volume base [of] manufacturing in South Africa, which makes it very difficult for our suppliers. We don’t have the economies of scale which you would normally need in our industry to, [in terms of] parts pricing, bring the prices down.
“So now you’ve got some of us invested into South Africa; invested into skills in South Africa; creating employment in South Africa; renting generators because there is not consistent power. And with all of that… you are not able to compete – and that is a mismatch,” Biene said.
“This is, I think, where we need to have a serious conversation also with the government: how can you… protect local manufacturing and how can you support that – not only support and protect but grow that – instead of flooding the market,” she concluded.
Year to date at the end of October 2024, VW Group Africa (including the Audi brand) has registered 55 333 units in Mzansi, representing a 2.4% decrease compared with the same reporting period in 2023.
Related content
Ford SA won’t get into ‘price war’ with Chinese firms
