Volkswagen to invest around R3 billion at Uitenhage plant

AUGUST 27, 2015

Volkswagen, which is seeking to become the world’s largest automaker by 2018, on Thursday announced plans to invest more than R4.5 billion in South Africa for new products and infrastructure.

The German manufacturer will spend about R3 billion on production facilities at Uitenhage, near Port Elizabeth and R1.5 billion on improving the supply chain by 2017.

“Exports will again play a key role in our strategy going forward,” Thomas Schaefer, managing director of Volkswagen Group South Africa, said in the statement.

Car manufacturers in South Africa, which also include Toyota Motor, BMW and Mercedes-Benz , are expected to export 18 percent more vehicles this year as companies take advantage of a weaker rand, the National Association of Automobile Manufacturers of South Africa said this month.

Sales in the domestic market will probably fall 2.8 percent in 2015 as consumers battle with rising fuel costs and interest rates, the industry body said.

Between 2007 and 2014 VWSA invested about R5.9bn in the country - for plant and infrastructure needed to make the existing generation Polo and Polo Vivo.

---Additional reporting Bloomberg