VW Africa laments power outages in ECape; Patel says Electricity Minister is tackling the problem

17th April 2024 By: Irma Venter - Creamer Media Senior Deputy Editor

VW Africa laments power outages in ECape; Patel says Electricity Minister is tackling the problem

Volkswagen Group Africa (VWA) last week suffered four power outages at its Kariega plant, says VWA MD and chairperson Martina Biene.

This happened while there was no loadshedding scheduled for the Eastern Cape.

Biene says the plant, which produces the Polo and Polo Vivo for the local and export markets, has been forced to rent backup generators at a cost of R130-million to keep the lights on.

“Thanks to these backup generators our plant operated with minimal disruptions, but other operations lost critical time. This money could have been spent elsewhere.”

VWA, like any other car plant, is heavily dependent on component supply from surrounding manufacturers.

Biene laments the fact that VWA has “still not been fully exempted from loadshedding” as is the case with vehicle manufacturers – original-equipment manufacturers, or OEMs – in other provinces.

“We’ll continue to appeal to all levels of government to heed our pleas to urgently address this issue by applying an equitable approach to all OEMs.”

Biene notes that VWA is also “concerned about the logistics and transport challenges affecting the company’s production and sales operations. Our team is continuously engaging with the relevant State-owned entities to address these challenges”.

Biene adds that “the progress is there, and we appreciate the willingness to assist and the efforts being made to improve performance”.

Eastern Cape Premier Lubabalo Oscar Mabuyane says he visited Volkswagen’s operations in Germany last year, during which the German car maker indicated “that it is not a charity organisation” that could continue to support a plant in a country where it yielded insufficient returns.

“Our country needs to deal with loadshedding, ensure it has investor-friendly policies, and manage our deteriorating infrastructure,” says Mabuyane.

“As a province we are only existing because of the auto sector.”

The Eastern Cape hosts the Isuzu, Mercedes-Benz and Volkswagen vehicle plants, as well as the Ford engine plant. The new Stellantis plant will also be in this province.

Gauteng is home to the BMW, Ford and Nissan car plants, and KwaZulu-Natal to the Toyota plant.

Trade, Industry and Competition Minister Ebrahim Patel says government “recognises the challenges the auto industry faces in terms of logistics and electricity supply”.

He also acknowledges that “VW and the Eastern Cape have been more sharply affected than the industry as a whole”.

“Martina, we have heard your very reasonable plea about energy security, and my colleague, the Minister of Electricity [Dr Kgosientsho Ramokgopa], is now directly working to resolve the challenge.

“In fact, he is now more familiar with the problems at VW, Isuzu and Mercedes-Benz than any other OEMs in the country, because we have raised these issues not only in direct discussions, but, as a Cabinet, we are aware of the importance of resolving these challenges to that we can lay a basis for the long-term growth of the auto sector in the Eastern Cape.”

VWA on Tuesday announced that it would invest R4-billion to assemble a third model at its Kariega plant, starting form 2027. Biene, Mabuyane and Patel spoke during the event.