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VW to invest R4 Billion in South Africa’s Automotive Sector
April 24, 2024
The recent announcement of Volkswagen South Africa’s (VWSA) R4 billion investment in their assembly plant located in Kariega, Eastern Cape, has been met with commendation from Trade, Industry, and Competition Minister, Ebrahim Patel.
This significant investment will introduce a new SUV model built on the Polo platform, positioning the facility as the exclusive manufacturer of the Polo brand worldwide. Moreover, the new SUV model will be exported to global markets, enhancing South Africa’s footprint in the automotive industry.
Minister Patel expressed his approval during a public announcement held at VWSA’s Kariega facility, emphasizing the investment’s alignment with the country’s industrial policy. He noted its pivotal role in bolstering the assembly plant and securing the livelihoods of approximately 3,500 direct employees at VWSA.
Furthermore, Patel highlighted the investment’s broader impact, fostering an ecosystem of prosperity and industrialization in the Eastern Cape, supporting an estimated 50,000 indirect jobs and livelihoods.
In the past five years, the government has undertaken significant efforts to strengthen the automotive production sector. Minister Patel outlined ten actions taken in the sixth administration to support the industry, including the implementation of the New Automotive Masterplan, agreements with international partners, and investment commitments totaling R50 billion.
The automotive industry remains a cornerstone of South Africa’s economy, contributing significantly to GDP and employment. In 2022, the manufacturing component of the auto industry contributed 2.9% of the country’s GDP, with over 115,000 direct employees and 240,000 indirect jobs.
Despite global challenges such as the COVID-19 pandemic and supply chain disruptions, South Africa’s automotive industry has continued to grow. In 2023, a record 399,594 vehicles were exported, showcasing the country’s industrial resilience and global competitiveness.
Last year marked a significant milestone as South Africa exported its six millionth vehicle since the start of the democratic era, underscoring the industry’s enduring significance and potential for further growth.
Minister Patel’s endorsement of VW’s investment reflects the government’s commitment to fostering a conducive environment for economic development and job creation in South Africa’s automotive sector.
