Investment includes new production technology in body and vehicle assembly operations as well as new engine manufacturing strategy.

The local arm of German vehicle manufacturer Volkswagen of South Africa (VWSA) will invest R3-billion up to 2010 to renew its manufacturing plant in Uitenhage in the Eastern Cape.

Volkswagen global head of production Dr Jochem Heizmann says that this includes the introduction of new production technology in body shop and vehicle assembly operations, and a new engine manufacturing strategy to supply both domestic and export markets.

He adds that VWSA will review its number of production platforms from three to two, as it drops the Golf/Jetta platform, which it currently exports.

"This platform strategy will present not only volume opportunities in the South African market, but also enhances export opportunities, improved quality and productivity," says Heizmann.

It is likely the two remaining platforms will be the Polo and the CitiGolf, and eventually its replacement, but in higher volumes than what is currently the case.

VWSA MD David Powels says both locally produced platforms will be for the domestic market, with one or maybe both destined for export market. He adds that the stalwart CitiGolf is to remain on the local market in the medium term, but notes that the company is working "incredibly hard on a successor".

Heizmann notes that higher volume manufacturing plans such as these require "significantly increased manufacturing localisation of components. We and our components suppliers will move from being just assembly operations to be true manufacturers with significantly increased manufacturing depth and increased use of local material."

Heizmann says local content will grow from the current levels of below 40% to about 70% over the next 18 to 24 months. He adds that the recently announced Automotive Production and Development Programme (replacing the Motor Industry Development Programme) which will run from 2013 to 2020 has created a planning environment conducive to VWSA's long-term South African strategic manufacturing plan.

Heizmann and Powels were speaking at the Johannesburg International Motor Show.