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Volkswagen South Africa secures new export contract
Posted on: Thursday, 05 June 2008. Article source: Engineering News, 8 May 2008
Vehicle manufacturer Volkswagen of South Africa (VWSA) has secured a new export contract which "will give VWSA record vehicle export volumes in 2008", says MD David Powels.
The new export contract, for 10 260 fifth-generation Jettas to go to countries such as Australia, New Zealand, Japan, Great Britain and Ireland, will ensure VWSA export more than 40 000 vehicles this year.
"The Volkswagen worldwide group posted record sales in 2007, which continued into the first quarter of 2008, placing the group's production facilities under capacity pressure.
"As a result, Volkswagen of South Africa has been given the opportunity to build fifth generation Jettas for these key right-hand-drive markets," explains Powels.
The additional order of fifth-generation Jettas comes on top of the plan to export 21 000 fifth-generation Golfs and 8 800 Polos in 2008 to various countries in the Asia Pacific region, with the bulk of these units going to Japan.
"This is a further opportunity for VWSA to demonstrate to the Volkswagen group and its customers in numerous countries, that we are capable of producing world-class quality products in our plant here in Uitenhage," says Powels.
"This additional export contract is particularly welcomed during a period when volumes in the domestic market are under pressure from macro-economic factors well-known to us all.
"We plan to build around 100 000 vehicles in our plant in Uitenhage this year, of which 40% will be exported."
VWSA says it will celebrate a number of export milestones this year. By the end of April, 100 000 fifth-generation Golfs will have been exported into countries in the Asia Pacific region. In addition, by the end of June, the local arm of the German vehicle manufacturer will have exported 350 000 vehicles into various markets around the world.
VWSA did not want to divulge the value of the new export contract.
Last year it was speculated that VWSA's Uitenhage plant may lose its contract to manufacture the Golf, as it was rumoured that production would shift from South Africa to Germany. At the time VWSA noted this was "purely speculative".
"Our company in South Africa has from the word go, embraced the principles of the Motor Industry Development Programme (MIDP)," adds Powels.
Through an aggressive export strategy, we have optimised not only our fully-built-up vehicle export potential, but also engine and component export contracts.
"In fact, the export business is at the core of our business strategy going into the future.
"It is critical that the government not only clarify the future of the MIDP on an urgent basis, but also structure it in a way that continues to encourage the South African manufacturing industry to optimise production platforms and maximise production volumes to both domestic and export markets."
The MIDP, government's support programme to the automotive industry, is currently the subject of a review, with the final details to be announced in August this year.
However, the Department of Trade and Industry (DTI) has indicated that it is set to introduce significant change to its automotive policy from 2012 - when the MIDP comes to an end - with the emphasis to shift from export incentives to volume-production support.
In a document published in December, the department noted that government "intends to support production platforms/investment plans that intend to reach a minimum volume of output per platform of 50 000 units per year within a reasonable period of time".
"The Volkswagen group has been extremely supportive of VWSA's export initiatives. This latest contract to supply...Jettas to key markets in 2008 is a clear indication of the confidence that the group has in the South African operation," says Powels.
"Together with the Volkswagen group, we are developing an aggressive long-term export strategy for VWSA.
"This longer term strategy will enable VWSA to continue to import the premium segment Audi Brand, and the entire Volkswagen commercial vehicle range.
"We are confident regarding the longer term prospects for VWSA as a volume manufacturer of globally competitive vehicles."
The new export contract, for 10 260 fifth-generation Jettas to go to countries such as Australia, New Zealand, Japan, Great Britain and Ireland, will ensure VWSA export more than 40 000 vehicles this year.
"The Volkswagen worldwide group posted record sales in 2007, which continued into the first quarter of 2008, placing the group's production facilities under capacity pressure.
"As a result, Volkswagen of South Africa has been given the opportunity to build fifth generation Jettas for these key right-hand-drive markets," explains Powels.
The additional order of fifth-generation Jettas comes on top of the plan to export 21 000 fifth-generation Golfs and 8 800 Polos in 2008 to various countries in the Asia Pacific region, with the bulk of these units going to Japan.
"This is a further opportunity for VWSA to demonstrate to the Volkswagen group and its customers in numerous countries, that we are capable of producing world-class quality products in our plant here in Uitenhage," says Powels.
"This additional export contract is particularly welcomed during a period when volumes in the domestic market are under pressure from macro-economic factors well-known to us all.
"We plan to build around 100 000 vehicles in our plant in Uitenhage this year, of which 40% will be exported."
VWSA says it will celebrate a number of export milestones this year. By the end of April, 100 000 fifth-generation Golfs will have been exported into countries in the Asia Pacific region. In addition, by the end of June, the local arm of the German vehicle manufacturer will have exported 350 000 vehicles into various markets around the world.
VWSA did not want to divulge the value of the new export contract.
Last year it was speculated that VWSA's Uitenhage plant may lose its contract to manufacture the Golf, as it was rumoured that production would shift from South Africa to Germany. At the time VWSA noted this was "purely speculative".
"Our company in South Africa has from the word go, embraced the principles of the Motor Industry Development Programme (MIDP)," adds Powels.
Through an aggressive export strategy, we have optimised not only our fully-built-up vehicle export potential, but also engine and component export contracts.
"In fact, the export business is at the core of our business strategy going into the future.
"It is critical that the government not only clarify the future of the MIDP on an urgent basis, but also structure it in a way that continues to encourage the South African manufacturing industry to optimise production platforms and maximise production volumes to both domestic and export markets."
The MIDP, government's support programme to the automotive industry, is currently the subject of a review, with the final details to be announced in August this year.
However, the Department of Trade and Industry (DTI) has indicated that it is set to introduce significant change to its automotive policy from 2012 - when the MIDP comes to an end - with the emphasis to shift from export incentives to volume-production support.
In a document published in December, the department noted that government "intends to support production platforms/investment plans that intend to reach a minimum volume of output per platform of 50 000 units per year within a reasonable period of time".
"The Volkswagen group has been extremely supportive of VWSA's export initiatives. This latest contract to supply...Jettas to key markets in 2008 is a clear indication of the confidence that the group has in the South African operation," says Powels.
"Together with the Volkswagen group, we are developing an aggressive long-term export strategy for VWSA.
"This longer term strategy will enable VWSA to continue to import the premium segment Audi Brand, and the entire Volkswagen commercial vehicle range.
"We are confident regarding the longer term prospects for VWSA as a volume manufacturer of globally competitive vehicles."
Article Tags: VWSA | Export
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