Name and Location
Volkswagen South Africa Group (VWSA) investment plan, Eastern Cape, South Africa.

Client
VWSA.

Project Description
The project involves upgrading and expanding VWSA’s Uitenhage plant to produce two new models for the local and export markets.

Both models will use VW’s small car Modular Transverse Matrix platform, which is used to build various models from a Saveiro half-ton pickup to a small sports utility vehicle, and feature new technologies and driver-assistance systems.

The current Polo Vivo and Polo production lines will be merged into one production line.

The investment will also result in the Uitenhage operation moving from a predominantly right-hand-drive market to one also producing left-hand-drive vehicles in ‘significant numbers’.

The investment will result in the plant increasing capacity from the current 120 000 vehicles a year to 150 000 vehicles a year.

Value
VWSA plans to invest more than R4.5-billion in its investment plan, which will include more than R3-billion in production facilities, about R1.5-billion in local supplier capacity and a further estimated R22-million for the development and training of employees.

Duration
Production of the two new models are expected to start in 2017, as the current models reach the end of their life cycle.

Latest Developments
Volkswagen’s planned R4.5-billion investment in South Africa is safe and will not be affected by a $1.1-billion cutback in yearly spending by the German automaker, VWSA MD Thomas Schaefer has said.

The cost-cutting exercise comes as Volkswagen attempts to deal with the fallout of a diesel emissions scandal, as a result of the company’s rigging the test results of several of its models sold abroad.

Locally sold Volkswagen models adhere to domestic emission standards and have not been affected.

VW has set aside $7.3-billion for repairs and compensation to customers, ruining its profit forecast for the year. The company could also face a fine of up to $18-billion in the US alone.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
VWSA spokesperson Matt Gennrich, tel +27 11 911 2789, fax +27 11 911 2700 or email gennrich@vwsa.co.za.