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Volkswagen’s R4 Billion Investment to Transform Kariega Facility for Locally Built SUV

Here’s a quick rundown before we delve into the specifics:

  • Massive Investment: Volkswagen is injecting R4 billion into its Kariega facility to prepare for the production of a new ICE-powered SUV, set to hit the market by 2027.
  • Facility Upgrades: The investment will cover capital expenditure for production facilities, tooling manufacturing, and quality assurance measures.
  • Futureproofing Jobs: This significant investment not only strengthens Volkswagen’s commitment to South Africa but also secures jobs for the local workforce and supplier network.

Now, let’s dive deeper into the details:

Volkswagen has unveiled plans to invest a staggering R4 billion into its Kariega facility, signaling a strategic move to gear up for the production of a new ICE-powered SUV. The investment will be allocated towards capital expenditure for production facilities, tooling manufacturing, and quality assurance measures, highlighting Volkswagen’s commitment to enhancing its manufacturing capabilities in South Africa.

Martina Biene, Chairperson and Managing Director of Volkswagen Group Africa, emphasized the significance of this investment in reaffirming Volkswagen’s longstanding presence in South Africa. “Plant Kariega is an important manufacturing plant within the Volkswagen Group production network,” stated Biene. “The new investment is a vote of confidence in the future of the plant, futureproofing jobs for our people and those employed in our supplier network.”

The new SUV, which is set to share the production line with the popular Polo and Polo Vivo models, will be developed in collaboration with Volkswagen Brazil. This collaboration ensures that the new model meets both local and continental requirements, including the development of a right-hand drive version. Biene also hinted at the potential for the model to be exported to other African markets where Volkswagen has a presence.

Despite the global shift towards electric vehicles (EVs), Biene confirmed that South Africa will continue manufacturing vehicles with internal combustion engines (ICEs) due to customer demand and the gradual introduction of EVs in these markets.

The investment not only facilitates the production of the new SUV but also provides training and upskilling opportunities for Volkswagen Group Africa’s production employees. Additionally, Volkswagen aims to achieve approximately 40% local content for the new model through a R1.2 billion investment, further emphasizing its commitment to localization.

In summary, Volkswagen’s monumental investment in the Kariega facility signifies a significant step towards strengthening its manufacturing capabilities and securing its position in the South African automotive industry.

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