At the opening of the Nelson Mandela Bay Logistics Park in Uitenhage yesterday, Volkswagen of South Africa announced the commencement of a major worldwide right-hand drive export contract for the all-new Volkswagen Polo.
As a result of a multibillion rand investment programme on the part of the Uitenhage-based company and its component suppliers, Volkswagen will export 19 000 New Polo’s to right-hand drive destinations around the world by the end of 2009 and will export a further 55 000 to the United Kingdom, Ireland, Australia, New Zealand, Malaysia and Singapore in 2010.
The investment programme commenced in 2008 when the company embarked upon a complete plant renewal process – including the installation of new technologies, facilities and equipment to enable the local establishment to build cars to worldwide quality and process standards.
“By the end of 2009, Volkswagen of South Africa will have invested R3,5 billion in new plant, local content development and new product. A further R500 million will be invested in 2010 to complete the process and ensure that the company is well placed to capture future opportunities both in the South African and global markets” said David Powels, Managing Director of VWSA.
“Production of the all-new Volkswagen Polo commenced at the Uitenhage plant in July 2009. By the end of the year, 19 000 New Polo’s will have left the Port Elizabeth harbour destined for customers around the world,” he added.
Set for its South African début in the first quarter of 2010, new Polo succeeds what is a current staple of the Volkswagen brand for local motorists. According to Powels, VWSA managed to capture the global RHD contract thanks to a collective R600 million investment by a number of suppliers (namely Rehau, Benteler, Faurecia and Grupo Antolin) in the Nelson Mandela Bay Logistics Park.
Powels revealed that the investment not only resulted in the creation on 685 new jobs in the local metropole, but significantly supplemented the firm’s globalisation strategy as 77 per cent of its suppliers are now based in Nelson Mandela Bay.
“The key elements of the Volkswagen strategy to ensure cost competitiveness not only in South Africa, but around the world, have revolved around platform reduction, a renewed manufacturing environment, dramatically increased local content, significant investment in skills development, transformation and investment in new product,” Powels explained.
“Historically Volkswagen of South Africa built cars on five platforms. This was reduced to three platforms in 2008 and will from 2010, reduce to two platforms. One will be the all-new Polo for both the domestic and export markets and the second platform will be a new A0 entry level car to be announced towards the end of the first quarter of 2010.”
“Volkswagen’s strategic intent has embraced the principles upon which the Motor Industry Development Program (MIDP) has been established and the intent of the new Automotive Production and Development Programme (APDP), which has been mapped out between the motor industry and Government in recent months” said Powels.
Key considerations on the part of the company have been to manufacture cars on high volume potential platforms and to increase local content from levels below 40 per cent to in excess of 70 per cent, as well as working with South African component suppliers to ensure cost index 100 to plants in Western Europe, to increase manufacturing depth – particularly 2nd and 3rd tier suppliers and to put significant investment into the training and skills development of people at all levels.
Thus, three production training academies have been established within the plant, each specialising in the training of employees in key technical areas such as Body and Press, Engines and Final Assembly.
“The Volkswagen Worldwide Group has illustrated its confidence in Volkswagen of South Africa as a manufacturing base, by awarding it the new Polo worldwide RHD export contract. Despite the domestic and global recession causing vehicle markets in the world to plummet, the Volkswagen Group has remained committed to long-term investments, such as those we have made in South Africa” said Powels.
“At the beginning of 2008, all 5 000 employees at Volkswagen of South Africa committed to key targets and goals to be achieved by the end of 2010. We are confident that we will achieve these targets and goals by the end of next year. A key milestone in this journey was the start of production of the new Polo initially for export markets and then for introduction in South Africa early in 2010. We are well on track in this regard and look forward to bringing the new Polo to motorists in South Africa early next year” concluded Powels.
