VOLKSWAGEN Group Africa’s R4 billion investment in its Kariega production facility includes R1.2 billion directed at achieving a localisation target of 40% for the new SUV model being added to the plant’s existing two-model line-up.
Earlier this month, Volkswagen Group Africa (VWGA) said it had entered the commissioning phase at Plant Kariega after halting production from 14 April to 12 May, when it completed the remaining 40% of the required installations and upgrades in the body shop, paint shop, and final assembly areas. The company said that when plans to add the new model to the production line in Kariega were announced in February this year, about 60% of the preparation work in production had already been completed during the December 2024 shutdown.
All installations have now been completed in the body shop, including station modifications and robot programming in the paint shop, as well as conveyor modifications in the final assembly, among other tasks.
The commissioning phase for the new model, scheduled for production from 2027, involves a systematic process of bringing new equipment online and performing necessary checks to ensure it functions optimally. This is being done over weekends in order to prevent any disruption to Plant Kariega’s production over three shifts, the company said.
VWGA said the A0 SUV Entry project is an exciting one for Plant Kariega, as it is working closely with colleagues in Volkswagen do Brasil to develop, build and launch this model.
“We are happy to be back to normal production, with the knowledge that we are one step closer to our future of building three models in our plant,” said VWGA production director, Ulrich Schwabe.
“I would like to thank every employee who has played a part in the process of preparing for this future icon in our Volkswagen line-up, and I look forward to working with these colleagues, as well as our Brazilian counterparts, as we continue on this journey.”
High-volume exports
VWGA’s Kariega plant has demonstrated its capability to produce large volumes of vehicles with high local content for export markets. Last year, the plant produced a record 167,084 vehicles, the largest volume produced at the plant since the first Beetle rolled off the production line 74 years ago.
Of the 167,084 vehicles produced, 131,485 units were Polos, which are exported to over 30 global markets, keeping VWGA in the top spot for vehicle exports from South Africa for the fifth consecutive year. According to Naamsa | The Automotive Business Council, total vehicle exports from South Africa declined by 2% to 390,844 units in 2024, down from the record 399,809 units exported in 2023. There was a 5,2% year-on-year decrease in vehicle production in South Africa last year, according to The Automotive Business Council.
For the increasingly competitive local market, VWGA produced 35,599 Polos and Polo Vivos. Polo and Vivo currently have 46% and 58% local content levels, respectively.
Plant Kariega is the sole supplier of the Polo GTI for global markets. In July 2024, the plant became the sole supplier of the Polo for European and Asia Pacific markets.
Earlier this year, Martina Biene, chairperson and managing director of Volkswagen Group Africa said: “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.”
She said South Africa is an important market for the Volkswagen Group, particularly in terms of the company’s long-term goal to establish its footprint on the African continent, which is seen as the last frontier for automotive development. Renaming the company to Volkswagen Group Africa is a sign of the group’s ambitions to expand the Volkswagen brand on the continent. “The new model has the potential to be sold in other African markets where Volkswagen has a presence,” Biene said.
Biene further added: “As most global vehicle markets transition to electric vehicles, African markets like 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. However, for the Volkswagen brand, the electrification journey [began] with the introduction of our ID.4 test fleet in South Africa and Rwanda.”
Increasing local competition
According to The Automotive Business Council, in 2024, there were no less than 50 passenger car brands and 2,203 model derivatives available in South Africa, giving consumers it the greatest selection of market-size ratio found globally.
New light vehicles (passenger cars and light commercial vehicles) imported into the country increased by nearly 3% to over 300,000 units in 2024, with 57% of these originating from India.
“Several global brands have established India as a production hub for small car plants, and most of the vehicles imported from India fell in the small car and entry-level segments.,” according to the Council.
China accounted for 17% of these imports. Six Chinese brands entered the local market in 2024, adding to the three brands that launched in 2023. Altogether, there were 14 different brands from China operating in the domestic new vehicle market in 2024, with more to follow in 2025, according to The Automotive Business Council.
