Thomas Schäfer
Volkswagen Group South Africa (VWSA) has lost production of around 17 000 vehicles at its Uitenhage plant, in the Eastern Cape, owing to the national Covid-19 lockdown, says chairperson and MD Thomas Schäfer.
The plant produces the Polo hatchback for the local and global export markets, with the Polo Vivo produced for the local and rest-of-Africa markets.
Around two-thirds of VWSA’s yearly production is destined for export markets, says Schäfer.
Total output at the Uitenhage plant reached around 162 000 units last year, he adds.
This year the VWSA plant plans to produce 140 000 units, taking the Covid-19 downturn into account, with exports at just over 100 000 units, says Schäfer.
“If the numbers we have in our system materialise, we can handle this year – not all is lost. If things go down further, it will be a problem.”
Europe is South Africa’s main new-vehicle export market.
“There is still demand in Europe for new cars,” notes Schäfer. “Obviously all markets have suffered from lockdowns one way or the other. I think the major problem in Europe at the moment is the never-ending discussion about subsidies for vehicles to get the economy up and running again.
“This means that a lot of customers are holding back purchases because they think there is a programme coming that will see them get cars cheaper. So, it’s a little bit of a skewed situation.”
Schäfer says current foot traffic at European dealerships “does not look great”.
He also describes the South African new-car market as “really weak”.
“We hope that dealers can go back to work soon.”
Dealerships are yet to open their doors following the lockdown.
Going forward, Schäfer says the domestic new-vehicle market will “hopefully not weaken” by more than 15% this year.
“We can still save the year; it is not all doom and gloom.”
The first vehicle rolled off the production line at the Uitenhage plant last week.
“We’ll push as hard as we can for exports,” says Schäfer. “Exports need to happen for cashflow purposes. We are a very cash-intensive company and we need to start selling cars.”
Schäfer believes the Polo Vivo will find itself in an ideal selling position as South Africans will increasingly look for a well-priced and value-for-money vehicle during and following the pandemic.