Volkswagen Group South Africa recently launched its new Polo and showcased its R6.1 billion investment in plants and new products in the Eastern Cape.
The majority of the investment, which initially started out as R4.5 billion in 2015, went towards capital expenditure for production facilities, local content tooling, quality assurance and manufacturing equipment as well as Information Technology upgrades.
The manufacturer introduced the innovative One-line Concept for the first time as part of the investment. The One-Line Concept will allow VWSA to build two completely different platforms on one line.
This will require a significant investment in training employees and calls for a new way of thinking according to Thomas Schaefer Chairman and Managing Director, Volkswagen Group South Africa.
“The introduction of the one line concept also includes a new integrated logistics concept. Whilst there are no short term financial benefits there are synergies and efficiencies as well as people benefits that come about as the result of the one line concept,” he explains.
Last year VWSA produced 110 000 cars which it expects to increase to 133 000 for 2018 of which 83 000 will be exported to markets around the world. This will include not only right hand drive markets but also to some left hand drive markets, especially for the Polo GTI. Maximum annual plant capacity is expected to be reached with a 3 shift operation of some 160 000 vehicles, in 2019.
Stability essential for investment
Schaefer says basic economic fundamentals and an investor friendly legislative framework within a reasonably stable economic environment are essential when making major investment decisions for Volkswagen, as is a stable and attractive automotive policy.
“The South African Government must be complimented, firstly for the introduction of the MIDP, which gave confidence to the industry and provided a stable base for the successor programme; the APDP which has also been successful in ensuring a future for the automotive sector in South Africa,” he notes.
“The South African automotive sector accounts for approximately 7.4% of the GDP and accounts for the direct employment of 113 000 people. I am convinced that the next phase of the APDP will continue in the same vein and allow for continued automotive investment,” Schaefer, adds.