Volkswagen Expanding South African Operations

German carmaker Volkswagen announced it will expand its commitment in South Africa as part of its expansion strategy (Strategy 2018).The German company announced that it will make an additional EUR50 million ($61.8 million) investment to modernize and expand the press shop at its Uitenhage plant in the country.

In addition, the company has spent EUR23 million ($28.4 million) to build a new Distribution Center in Centurion (near Pretoria). The cash injections follow on from investment totaling around EUR500 million ($618 million) made in South Africa over the last four years.

"We want to make Volkswagen the world’s leading automaker in economic and ecological terms by 2018. And the Uitenhage plant plays an important role in this context," Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, said in Centurion on Thursday in the presence of Kgalema Motlanthe, South Africa’s Vice President.

"Volkswagen is the market leader on South Africa’s passenger car market. Our existing investment, coupled with the new measures, lays the foundation for staying on our growth path," Winterkorn added. "We have created 1,000 new jobs over the last 12 months, started production of the new Polo and significantly expanded local content. Volkswagen remains in the fast lane in South Africa."

Volkswagen South Africa has recently increased the level of locally-sourced parts from 40 to 70 percent, as part of an aggressive localization plan. The company has also developed a new export strategy, which has seen the Polo, Polo Vivo and Cross Polo’s assembly debut in the country.

The German company will also bring the BlueMotion technology to South Africa in October, launching the BlueMotion Polo, Golf, Tiguan and Touareg models.