German car giants, Volkswagen, is set to invest a fresh $210 million in its South African manufacturing plant located at the Eastern Cape in preparation for the manufacture of a new brand of SUV in 2027.
According to Reuters, the German car maker said the $210 million investment would be used to upgrade facilities in various areas in the plant in preparation for the addition of a third model to its production line from 2027.
Martina Biene, Chairperson and Managing Director of Volkswagen Group Africa, explained the company’s goal and how it aligns with the realities of the automobile market in Africa at the moment.
- “As most global vehicle markets transition to electric vehicles, African markets like South Africa will continue manufacturing and selling vehicles with internal combustion engines (ICEs) for the foreseeable future,” said Martina Biene
- “This will be due to customer demand for ICEs and slow introduction of electric vehicles in these markets,” Biene added.
Meanwhile, European Union countries are committed to a target of ending sales of Co2 emitting cars by 2035. In the United States, the plan is to increase the share of fully electric vehicles to as much as 35% of the automobile market.
The first phase of the Volkswagen plant facility, also known as the Kariega Plant, will begin at the end of 2024 during the plant shutdown, Volkswagen said.
Volkswagen Brazil team will lead the design and development of the new SUV while Volkswagen Group’s Africa engineering team would focus on adapting the SUV to fit local and continental requirements such as right-hand driving.
Volkswagen revealed very little details about the new model of SUV in contention. The German car maker did not reveal the name of the new SUV.
Aside the planned new model of SUV to be introduced to the plant by 2027, Volkswagen manufactures Polo and Polo Vivo models in the South African plant.
Biene said the new model SUV would be sold in African countries with Volkswagen presence and, in addition to this new model, Volkswagen will also introduce its ID.4 test fleet in South Africa and Rwanda.
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What to know
- South Africa is the largest automotive manufacturing hub on the African continent, hosting global brands such as Toyota, Isuzu, Volkswagen and Mercedes.
- Volkswagen has invested over $538 million in its Kariega plant located at the Eastern Cape of South Africa since 2011.
- According to Statista, Volkswagen was the second-best selling carmaker in South Africa with over 6,316 vehicles sold in 2023. The German carmakers were only eclipsed by Toyota which sold over 12,704 units in the same year.