Local vehicle manufacturer Volkswagen of South Africa (VWSA) this week re-entered the affordable passenger vehicle segment with the introduction of the new Polo Vivo, the company's replacement for the 25-year-old CitiGolf, which was discontinued last year.
The Vivo uses the old Polo as its platform, and is again, as was the case with the CitiGolf, a South Africa-only vehicle, designed and built by VWSA.
In the 1980s, VWSA dressed up the Golf 1 and rebranded it as the CitiGolf to ensure it kept a presence in the lucrative entry-level segment of the market. However, continuing the CitiGolf much longer into the new millennium became too expensive, while competitors, especially from the East, also presented some stiff competition with a slew of new products, said VWSA sales and marketing GM Stuart Norman.
It was essential for VWSA to re-enter the market with a more affordable vehicle than the new Polo, launched in January, and which started selling at around R150 000.
Norman said 73% of VWSA's passenger vehicle sales in 2009 had been in the low-price end of the market.
Pricing for the nippy Vivo starts at R101 500. Its competitors are, among others, the Renault Sandero and Toyota Yaris.
It has a 70%-plus local content by value, excluding the engine and gearbox.
The Vivo, built in VWSA's Uitenhage plant, comes in 1,4 l and 1,6 l derivatives.
Carbon dioxide emission levels are measured at 147 g/km for the 1,4 l, 55 kW vehicle, with the threshold to dodge government's new carbon levy set at 120 g. The tax will be implemented in September.
VWSA MD David Powels said that VWSA was able to offer the Polo Vivo so much cheaper than its 'predecessor' - which was priced at R140 000-plus as recently as last year -- owing to the fact that it now had a much higher local content, which meant a sharp cut in logistics cost, for example, while also creating economies of scale for component manufacturers.
The local content in the old Polo was 39%.
Comparisons are inevitable, but Powels was at pains to point out that the Polo Vivo and the old Polo were very different vehicles.
The Vivo boasts, for example, different headlights and taillights, as well as a surgically altered nose.
As the Polo Vivo followed the CitiGolf blueprint to some degree, VWSA would not be able to see a new model introduction of the Polo Vivo, as that would add too many costs to the price tag of the vehicle. At most, the Vivo would receive facelifts every now and then, as was the case with the CitiGolf.
Powels believed the high residual value of the old Polo would protect its resale value as the new Vivo entered the market.
Powels said it was possible to export the Polo Vivo to markets in sub-Saharan Africa as soon as the market demanded it.