Johannesburg: President Cyril Ramaphosa has welcomed Volkswagen Group Africa's R4 billion investment linked to the introduction of the new Volkswagen Tengo, describing it as a vote of confidence in South Africa's manufacturing capabilities, workers, and investment environment. President Ramaphosa was speaking at Volkswagen Group Africa's 75th anniversary celebration at the company's Kariega plant in the Eastern Cape on Monday evening.
According to South African Government News Agency, the investment will support the introduction of the Tengo, which will become the third model manufactured at the Kariega plant, alongside the Polo and Polo Vivo. President Ramaphosa expressed optimism about Volkswagen's continued commitment to South Africa, highlighting that the investment reflects confidence in the country's workforce and manufacturing potential.
The President emphasized the significance of the automotive sector to South Africa's economy, noting its support for over 115,000 direct manufacturing jobs and more than half a million jobs across the automotive value chain. The industry contributes just over 5% to the gross domestic product and exports to 155 destinations. He noted that vehicles produced in South Africa reach markets across Europe, the United Kingdom, the United States, Africa, and other parts of the world, underscoring the industry's critical role in economic growth, export expansion, investment attraction, and job creation.
Volkswagen has a long history at the Kariega plant, with nearly five million vehicles produced since the first Beetle in 1951. The facility is notable for being the oldest Volkswagen manufacturing plant outside Europe and the only one worldwide that manufactures and exports the Volkswagen Polo to Europe and the Asia-Pacific. Last year alone, the plant produced over 156,000 vehicles, with almost 120,000 exported internationally.
President Ramaphosa also addressed the automotive industry's transition towards new-energy vehicles, including battery electric vehicles and hybrids. He pointed out that this transition presents both challenges and opportunities for South Africa, given its established manufacturing base, skilled workforce, and significant mineral reserves essential for future technologies. The government is actively working to create a stable and supportive policy environment for automotive companies to invest, localize, and grow.
Efforts are underway to review the South African Automotive Masterplan and policy framework to adapt to industry changes. The President highlighted ongoing discussions among industry partners, unions, and the government to develop a unified program to grow and sustain the automotive sector in South Africa, emphasizing the importance of policy certainty and competitiveness as an investment destination.
The President underscored the government's objective to increase local vehicle production, enhance domestic sales of locally manufactured vehicles, and create more jobs and opportunities. He also called for greater participation by black industrialists in the automotive value chain and the development of capabilities in batteries, electronics, and other technologies shaping future vehicles.
Volkswagen's investment in the local community was also acknowledged, with more than R800 million allocated to social investments around the Kariega plant. This includes the establishment of the LEAP 9 Maths and Science School in KwaNobuhle and collaboration with the Department of Basic Education on early childhood development and education competencies. The company also invests R40 million annually in the Youth Employment Service to provide work experience for unemployed youth.
Reflecting on Volkswagen's 75-year presence in South Africa, President Ramaphosa praised the company's integral role in the country's social and economic landscape. He recalled Volkswagen's pioneering efforts during apartheid, being the first in the automotive industry to recognize black trade unions and employ black artisans. The President called for stronger partnerships between government, business, and labor as the global automotive industry shifts towards new-energy vehicles.
President Ramaphosa concluded by expressing gratitude to Volkswagen for its sustained investment in South Africa and urged continued collaboration to build vehicles in the country for years to come.
