Volkswagen SA has announced a R12 billion engine export contract which will see the local manufacturer build more than 440 000 engines over six years for the VW group’s Hannover plant in Germany.

This new win follows another R350 million parts contract which it won last year.

This year about 35 000 engines, which are for the LT panel van range, are expected to be exported. This figure will grow to between 68 000 and 70 000 per year in the next five years.

VWSA managing director Andreas Tostmann said the company had invested R240 million in its facilities to successfully manage the contract. An additional 400 jobs had also being created.

He said that the local plant would be the sole supplier of these TDI engines to Hannover and this made production schedule and rigid quality standards critical.

“The contract will be extended to include the next generation of five-cylinder engines and, possibly, a petrol engine destined for export to China.

“It has also enabled VWSA to secure an additional 250 jobs in Uitenhage, while indirectly at the seven suppliers involved – Autocast, Alucast, Belmec, Luk Africa, Sentech, First Pro and Zealous – more than 130 additional jobs have been created,” added Tostmann.

With one exception, all the suppliers are Eastern Cape based companies.

Although VWSA had built a number of engines for export to niche manufacturers in recent years, three years ago it had embarked on large-scale supply with the industrial engines for Volkswagen Salzgitter.

In 2002 VWSA secured a R4,2 billion vehicle export contract, including catalytic converters, rubber metal components, drive-shafts and alloy wheels.