Volkswagen Group Africa (VWA) announced a R4bn investment in its manufacturing plant in Kariega.

The investment will be used to upgrade facilities in various areas in preparation for the addition of a third model to its production line-up from 2027.

Most of the R4bn investment will be allocated to capital expenditure for production facilities, manufacturing tooling, local content tooling and quality assurance. Nearly R877m will be spent to enhance automation in the body shop. In the press shop, an estimated R418m will be utilised to procure new press tooling. The first phase of the plant facility upgrade will begin at the end of 2024 during the plant shutdown.

Martina Biene, chairperson and MD of VWA, said the investment announcement reaffirms the group’s commitment to SA, where it has been manufacturing vehicles for nearly 73 years.

“Plant Kariega is an important manufacturing plant within the Volkswagen production network. Since 2011, Volkswagen has invested R10,28bn in production facilities, manufacturing equipment, local content tooling and training of people,” she said.

According to Biene, the latest investment will future-proof jobs, not only for people at the plant, but employees of the supplier network. The third model, which will be a SUV, will be manufactured on the same production line as the Polo and Polo Vivo.

The changes being made in preparation for the production of the new SUV also affords training and upskilling opportunities for production employees.

Polo and Vivo currently have 46% and 58% local content levels respectively. The trend is set to continue with the new model, which aims to achieve approximately 40% local content through a R1,2bn investment.

Volkswagen Brazil is leading the design and development of the new SUV. VWA’s engineering team has collaborated with Volkswagen Brazil for the adaptation of the new model to the local and continental requirements, that for example includes the development of a right-hand drive version.

The new model has the potential to be sold in other African markets where Volkswagen has a presence, Biene confirmed. “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."

“However, for the Volkswagen brand the electrification journey begins this year with the introduction of our ID.4 test fleet in South Africa and Rwanda.”