Volkswagen to invest R4b into Kariega for locally built SUV
Confirmed! A new SUV is headed to the Kariega production line after Volkswagen announced a massive investment to upgrade the facility.
A total of R4b will be invested into the Kariega facility, which will be allocated as capital expenditure for production facilities, manufacturing of tooling, local content tooling and quality assurance of a new ICE-powered SUV by 2027 touted to be more affordable than the T-Cross.
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Volkswagen adds that nearly R877m will be spent to enhance automation in the Body Shop while an estimated R418m 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.
Related: Volkswagen Kariega Hits 1.5M Export Vehicles Milestone
Martina Biene, the 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 R10.28b 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 future proofs jobs, not only for our people but also those employed in our supplier network,” explained 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: “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 R1.2b investment.
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