VWSA ramps up its investment

New investment encouraged by the Automotive Development Programme and Automotive Investment Scheme.

Volkswagen SA (VWSA) yesterday announced a R500m investment in a new workshop facility, adding to a R5,23bn investment by the group in SA over the past four years.

The investment is to help VWSA increase its local content manufacturing and enhance global competitiveness.

It was also encouraged by the government's Automotive Development Programme and Automotive Investment Scheme.

Trade and Industry Minister Rob Davies described the investment as one of the biggest in the sector and said it would help boost local manufacturing.

"Since the onset of the global recession, there has been R9bn worth of investment in the automotive sector by BMW, Ford and VWSA, with VWSA contributing R4bn of that total," he said.

The R500m injection would be at the Uitenhage plant in the Eastern Cape for the production of VWSA's Polo and Polo Vivo cars, and is expected to spark associated activity such as component manufacturing and distribution.

VWSA CEO David Powels said that ultimately, local content would increase from 40% to more than 70% on the Polo and Polo Vivo cars.

"Producing local content and associated activity would be worth R4bn and has the potential to initially create 3500 jobs, with 20000 more in future," Mr Davies said.

VWSA also claimed to have doubled local production volumes this year from last year .

"In 2010 we will have built over 120000 cars, 75000 of which will be new Polos destined for right-hand-drive markets around the world, as well as certain left- hand-drive markets in Europe," said Volkswagen 's global chairman, Martin Winterkorn.

VWSA said the investments made enabled it to instal new production technologies in the body shop and vehicle assembly plant in Uitenhage.

"We now have a renewed manufacturing facility in Uitenhage, capable of building even higher-quality products, more productively and more competitively for both the South African domestic and global export markets," Mr Winterkorn said.

He said the South African public was particularly receptive to the new Polo, which was "truly the benchmark" in its segment.

He said that this year , VWSA was the passenger car leader with a 21% domestic market share.

"To illustrate our confidence in the ability of VWSA, the Uitenhage-based operation is now the sole supplier of four-door Polos to all right-hand-drive markets around the world.

"In addition, the South African plant is the sole manufacturer of the all-new CrossPolo for global markets," Mr Winterkorn said.

VWSA would also start constructing a R60m dealer training academy on the site adjoining the new distribution centre.

"The clear objective of this dealer training academy is to improve our capabilities at the customer retail level in all spheres of this vitally important aspect of our business," he said.