VW unveils R6bn facility
New Polo and Vivo models to be made on innovative line
Volkswagen South Africa unveiled its R6-billion, state-of-the-art vehicle production facilities in Uitenhage yesterday.
It had planned to invest R4.5-billion, but revealed yesterday that it had, in fact, sunk R6.1-billion into the new production line and related facilities, suppliers and to develop local content.
It also unveiled its new Volkswagen Polo and entry-level Volkswagen Vivo vehicles.
The new Polo and Vivo line, which represents a significant shift in production techniques at the 70-year-old factory, allows both models to be built on the same line simultaneously, for the first time.
Due to anticipated demand for the new vehicles, the company will introduce a third production shift in April.
The Polo and Vivo are South Africa’s bestselling passenger cars.
Volkswagen has dominated this market segment for the past seven years.
While the Polo is expected to be available shortly, more details about the availability of the Vivo will be known only after it is officially launched later this quarter.
VWSA chairman and managing director Thomas Schaefer said the majority of the investment had been spent on production facilities, local content tooling, quality assurance and manufacturing equipment, as well as information technology upgrades.
“Localisation remains a key priority for VWSA, with the new models at a 60% local content level and ongoing plans to achieve higher levels,” he said.
“Volkswagen introduces the innovative One-line Concept for the first time as part of the investment. It has always been possible to build derivatives of the same platform on one line, but to build two completely different platforms on one line is a technical challenge, highly complex and requires new thinking and training for the employees.
“The introduction of the one-line concept includes a new integrated logistics concept.
“While there are no short-term financial benefits, there are synergies and efficiencies as well as people benefits.”
He said 330 new robots had been deployed in the facility, where 3 800 people work for the metro’s largest private employer.
“VWSA did not release any employees as the production volumes decreased during the ramp-up, but rather retrained them in training pools until the third shift commences in April this year. “We produced 110 000 cars last year. “This will increase to 133 000 for 2018, of which 83 000 will be exported to markets around the world.
“This will include not only right-handdrive markets but also to some left-handdrive markets, especially for the Polo GTI.
“Maximum annual plant capacity is expected to be reached with a three-shift operation of some 160 000 vehicles in 2019.”
Stressing the importance to the automotive industry of basic economic fundamentals and an investor-friendly legislative framework within a reasonably stable economic environment, he hailed the government’s stable and attractive automotive policy.
“The government must be complimented, firstly, for the introduction of the MIDP [Motor Industry Development Plan], which gave confidence to the industry and provided a stable base for the successor programme; and the APDP [Automotive Production and Development Programme], which has also been successful in ensuring a future for the automotive sector in South Africa.
“The automotive sector accounts for about 7.4% of the GDP [gross domestic product] and accounts for the direct employment of 113 000 people.
“I am convinced the next phase of the APDP will continue in the same vein and allow for continued automotive investment.”
At the event were government officials and other dignitaries, including Eastern Cape premier Phumulo Masualle and Trade and Industry Deputy Minister Bulelani Magwanishe.
Masualle said: “The automotive sector is one of the key sectors in our provincial economy mix, which we believe – alongside the oceans economy, agriculture and energy – if correctly leveraged, can see the Eastern Cape not only grow the regional economy and contribute towards further national economic growth, but also become a leader in the drive to modernise and reskill our workforce.
“We are particularly encouraged by Volkswagen SA’s commitment to not only their continued and expanding investment in the economy, but also bold initiatives such as the announcement of an R86-million grant to SMMEs in the manufacturing and distribution space of automotive parts.
“This is a clear signal of the private sector accepting that South Africa’s future prosperity will depend on the societal effort all of us are prepared to invest, not just the government.
“We hope to continue our partnership to undertake a skills revolution in our province by jointly entering into training ventures so that we may be able to improve our skills base and increase the employability and entrepreneurial prospects of our people.”
