Volkswagen South Africa (VWSA) is planning an investment of USD343.3 million through to 2017, reports local publication the Pretoria News. The proposed investment is expected to increase annual production capacity at the automaker's Uitenhage (South Africa) plant by about 50% to around 150,000 units. VWSA managing director Thomas Schaefer said, "South Africa is a production location for the future. We are here for the long run." VWSA will reportedly announce the production details of two new models, which will be manufactured at the plant in the coming weeks, according to the report. Of the total investment, VWSA plans to spend USD277.3 million on production facilities and improving qualitative aspects, around USD113.7 million on automotive component supplies and plant tooling, and USD1.5 million on training for employees. The investment will reportedly have exports as its main focus.
Significance: VWSA's plant in Uitenhage in Eastern Cape is responsible for the production of the Polo, and the Polo Vivo in completely built-up form, and the Jetta in completely knocked-down form with vehicle kits sourced from VW’s plants in Mexico. The output of the plant between 2010 and 2014 averaged around 117,000 units per annum (upa). With the South African rand depreciating against major foreign currencies, South Africa has become a cheaper base for manufacturing, while this is further helped by the government’s Automotive Production and Development Programme (APDP) and Automotive Incentive Scheme, which are promoting further investment in the region. IHS Automotive forecasts that production at the site will peak at almost 145,000 upa by the end of the decade.
