Investing in South Africa

Volkwagen invests billions in SA

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17 February 2006

Volkswagen South Africa says that buoyant conditions in the local market have been responsible for its exceptional performance in the last year.

The country's largest vehicle exporter has seen a 60% growth in its local sales volume since 2003, growth that it says it due to a vibrant local market and an aggressive investment strategy begun in 2000.

R6 bil investment
"In fact, in the period 2000 through 2008, Volkswagen South Africa will have invested over R6-billion in new models, a new paint shop and a new truck and bus assembly plant," said the company's MD Andreas Tostmann in a press release.

"This aggressive investment strategy is now bearing fruit in terms of job creation, growth in the domestic passenger market, growth in export volumes and building the brand's presence."

In 2005, the company produced 112 000 Jettas, Polos and Golfs at its Uitenhage factory, twice the number they made eight years ago.

Job creation
"[This] has enabled the company to increase its total number of employees by 19% over the period. Over 1000 new jobs have been created in Uitenhage, excluding a similar number of new jobs created within the Volkswagen supplier network.

"This is critical to the region which suffers from extremely high unemployment levels."

Although most of these cars were destined for the local market, the company is the leading car exporter from South Africa.

Room for growth
With exports increasing by about 30% over the past year to 40 000 vehicles, mainly to the Japanese market, Volkswagen beat out rivals DaimlerChrysler (30 000) and BMW (29 000) to become South Africa's number one vehicle exporter.

And, said Tostmann, there's still room for growth. He believes that total annual vehicle sales of 1 million can be reached by 2010.

"All it requires is 10% annual compound growth on the 2005 sales figure of 618 201 vehicles."

Southafrica.info reporter