Volkswagen to Invest 4 Billion Rand in South African Plant for New SUV Production

Volkswagen announced its intention to inject 4 billion rand ($210.67 million) into its South African manufacturing facility located in the Eastern Cape, paving the way for the production of a new SUV starting from 2027.

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South Africa, renowned as the continent’s largest automotive manufacturing hub, boasts a lineup of global automotive giants including Toyota, Isuzu, Volkswagen, and Mercedes.

Volkswagen’s investment aims to enhance existing facilities across various areas in anticipation of integrating a third model into its production lineup by 2027.

Martina Biene, Chairperson and Managing Director of Volkswagen Group Africa, emphasized that despite the global shift towards electric vehicles, South Africa and similar African markets will continue manufacturing and selling vehicles with internal combustion engines (ICEs) due to ongoing customer demand and the gradual adoption of electric vehicles in these regions.

While European Union countries commit to phasing out sales of new CO2-emitting cars by 2035 and the U.S. aims to significantly increase the share of fully electric vehicles, Volkswagen’s investment underscores its commitment to the continued production of ICE vehicles to meet market demands.

The initial phase of facility upgrades at the Kariega plant is scheduled to commence by the end of 2024 during a planned plant shutdown. Volkswagen Brazil is taking the lead in designing and developing the new SUV, collaborating with Volkswagen Group Africa’s engineering team to adapt the vehicle to local and continental requirements, including right-hand driving specifications.

Although the carmaker has yet to disclose the name of the new SUV, it currently manufactures Polo and Polo Vivo models at its South African plant. Since 2011, Volkswagen has invested a total of 10.28 billion rand in the Kariega plant.

Biene hinted at the possibility of introducing the new model to other African markets where Volkswagen has a presence. Additionally, alongside the new model launch, Volkswagen plans to introduce its ID.4 test fleet in South Africa and Rwanda, signaling further advancements in its product offerings in the region.

($1 = 18.9868 rand)