Volkswagen has announced that it will invest R4 billion into its Kariega facility to prepare for the production of a new ICE-powered SUV by 2027 which is touted to be more affordable than the T-Cross.
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A total of R4 billion will be invested into the facility, which will be allocated as capital expenditure for production facilities, manufacturing of tooling, local content tooling and quality assurance of the newcomer. Volkswagen adds that nearly R877 million will be spent to enhance automation in the Body Shop while an estimated R418 million will be utilised to procure new press tooling for the Press Shop. The first phase of the plant facility upgrade will begin at the end of 2024 during the plant shutdown.
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Martina Biene, Chairperson and Managing Director of Volkswagen Group Africa, said the investment announcement reaffirms Volkswagen Group’s commitment to South Africa, where it has been manufacturing vehicles for nearly 73 years.
“Plant Kariega is an important manufacturing plant within the Volkswagen Group production network. Since 2011, Volkswagen has invested R10,28 billion in production facilities, manufacturing equipment, local content tooling and training of people. The new investment is a vote of confidence in the future of the plant. It also futureproofs jobs, not only for our people but also those employed in our supplier network,” – Biene.
Volkswagen hasn’t named the third model that is birthed on the production line yet although they have detailed it will be an SUV that will share the same production line as the Polo and Polo Vivo – the top-selling passenger models for the Volkswagen Passenger Cars Brand in South Africa. The automaker also mentioned that Volkswagen Brazil will be leading the design and development of the new model although Volkswagen Group Africa’s Engineering team has collaborated with the South American branch for the adaptation of the new model to the local and continental requirements. This includes the development of a right-hand drive version. Once production is underway, Biene added that the model has the potential to be sold into other African markets where Volkswagen has a presence too.
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More importantly, while the rest of the world and its production facilities have already begun adapting their plants for EVs, Biene has added that “South Africa will continue manufacturing and selling vehicles with internal combustion engines (ICEs) for the foreseeable future, owing to customer demand for ICEs and slow introduction of electric vehicles in these markets.”
The changes being made in preparation for the production of the new SUV also affords training and upskilling opportunities for Volkswagen Group Africa’s production employees.
Localisation remains a key priority for Volkswagen Group Africa. Polo and Vivo currently have 46% and 58% local content levels respectively. The trend is set to continue with the new model, which aims to achieve approximately 40% local content through a R1,2 billion investment. Confirmed! A new SUV is headed to the Kariega production line after Volkswagen announced a massive R4 billion investment to upgrade the facility today. The high-riding model will retain an ICE powertrain and commence production by 2027. Here are all details!
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