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VWSA to launch Up in 2015; in talks to secure new Polo production

David Powels with the electric version of the VW UP

David Powels with the electric version of the VW UP

Photo by Duane Daws

9th December 2014

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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Volkswagen Group South Africa (VWSA) will launch the Up small car in South Africa early next year, says VWSA MD David Powels.

Speaking to Engineering News Online, he says the three-door Up will make its debut under the Polo Vivo, which is currently VWSA’s lowest priced vehicle in the domestic market.

The Vivo is made at the VWSA plant in Uitenhage, in the Eastern Cape, and is one of the country’s top-selling passenger cars.

Powels believes the Up will not curb Vivo demand, as it targets a different market, with the Vivo much bigger than the Up, which is viewed as a mini-car.

VWSA will be importing the Up into South Africa as passenger car market dominance requires “a presence in every segment”, says Powels.

He adds that the electric Golf will, most likely, no longer make its debut in South Africa in 2015. However, VWSA is mulling the introduction of the hybrid Golf to the local market.

“We are still not convinced that South Africa is ready for electric vehicles. We have them in the group, but we are not convinced that society is ready, that the business case is ready, and that the enabling infrastructure is there. The hybrid Golf is a no compromise, high-performance vehicle,” notes Powels.

PRODUCTION INCREASES AT UITENHAGE
VWSA is still locked in talks with its German parent company to secure local and export production of the new-generation Polo, says Powels.

VWSA also assembles the current Polo model at Uitenhage, for the South African and export markets, with this vehicle in the middle of its life-cycle.

The next generation Polo will be built on the new MQB-A0 platform.

“We want to position VWSA to secure higher production volumes. We want to get the plant back to a three-shift operation, as was the case in 2011,” says Powels.

He says VWSA is hopeful of returning production at Uitenhage to 150 000 units a year, up from 116 000 in 2014, running on two shifts, and 103 000 units in 2013.

Powels expects 2015 volumes at the Uitenhage plant to remain at levels seen in 2014.

Current production is split roughly 50-50 between local and export markets.

POWELS TO BRAZIL
Volkswagen announced in November that Powels has been appointed as president of Volkswagen do Brasil, with Thomas Schafer in 2015 taking over as the new MD of VWSA.

One month before his departure, Powels says the South African automotive industry has four distinct challenges.

The industry requires ongoing industrial policy stability, which will allow global investors to continue funding their operations in the country. This means no sudden or comprehensive changes to government’s Automotive Production and Development Programme, he emphasises.

Stability of labour supply is also vital.

Powels says the last two cycles of negotiations (punctuated by prolonged strikes) between labour and the automotive industry to secure multiyear wage deals “were not good”.

“We are totally integrated into global supply chains. We need labour stability.”

The third challenge is for the local automotive industry to become more globally competitive – despite significant progress in the last 15 years – by increasing production volumes, manufacturing efficiencies and local content on the vehicle produced in South Africa.

Increased local content will reduce inbound logistics costs.

Powels says the South African supply chain – the integrated chain, with all its stakeholders – will also do well to improve its efficiencies. Participants here include port authorities, logistics service providers and labour, for example.

“As a whole, the value chain needs to be globally competitive. We need to work together to make that value chain, step by step, more competitive.”

The local automotive industry can also improve its situation by facilitating the growth of the domestic new vehicle market.

“It would be naïve to think we can grow the production base just through exports. If we want to grow manufacturing, we have to grow local demand,” says Powels.

 

Edited by Creamer Media Reporter

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