Volkswagen Announces $210 Million Investment in South Africa

Volkswagen to Invest $210 Million in South African Plant for New SUV Production

Volkswagen plans to invest 4 billion rand ($210.67 million) in its South African manufacturing plant in the Eastern Cape to prepare for the production of a new SUV set to launch in 2027. South Africa, home to global automotive brands like Toyota, Isuzu, and Mercedes, is the largest automotive manufacturing hub in Africa.

The investment will be used to upgrade facilities in preparation for adding a third model to the production line-up by 2027. Martina Biene, Chairperson and Managing Director of Volkswagen Group Africa, highlighted that South Africa and other African markets will continue to produce vehicles with internal combustion engines due to customer demand and the slow adoption of electric vehicles in these regions.

As the global shift towards electric vehicles continues, the European Union has committed to ending sales of new CO2-emitting cars by 2035, while the U.S. aims to increase the share of fully electric vehicles sold. The upgrade of the Kariega plant facility, led by Volkswagen Brazil in collaboration with Volkswagen Group Africa’s engineering team, will begin in late 2024 during the plant shutdown.

The new SUV’s design and development will cater to local and continental requirements, including right-hand driving, but its name has not been disclosed yet. Volkswagen’s South African plant currently produces Polo and Polo Vivo models and has received a total investment of 10.28 billion rand since 2011. The new model may also be introduced in other African markets where Volkswagen has a presence, and the carmaker will introduce its ID.4 test fleet in South Africa and Rwanda.

Overall, Volkswagen’s investment in the South African plant reflects its commitment to the region and the continued production of vehicles tailored to local market demands.