The Minister of Trade, Industry and Competition, Minister Ebrahim Patel, has welcomed a new R4 billion investment by Volkswagen South Africa (VWSA) in their assembly plant in Kariega, Eastern Cape. This investment will be used to add a new model to the production line – a brand new SUV built off the Polo platform; and position the facility as the sole manufacturer of the Polo brand globally. The new SUV model is expected to be exported to global markets.
Speaking at the announcement event held at VWSA’s facility in Kariega, Minister Patel remarked:
“This investment builds upon a legacy of commitment and exemplifies the success of our industrial policy, fortifying not only the assembly plant but also the livelihoods of about 3 500 individuals directly employed by VWSA. Moreover, this investment has rippled through this part of the Eastern Cape, fostering an ecosystem of prosperity and industrialisation, supporting an estimated 50,000 indirect jobs and livelihoods.”
In the last five years, Government has undertaken significant work in order to bolster automotive production in South Africa. Minister Patel highlighted ten actions which have been taken in the Sixth Administration to support the industry:
- A New Automotive Masterplan crafted together with industry, was implemented in July 2021, setting the policy framework for the next decade;
- The modalities for the African Continental Free Trade Agreement have been concluded, including a start made with rules of origin for a first list of auto products and the opening up of a potentially vast market;
- A free-trade agreement with the UK after Brexit was concluded and implemented, which enabled SA to retain access on preferential terms in the UK market;
- The R6 billion Auto Industry Transformation Fund was established – in which VWSA and other OEMs contribute to bringing black component manufacturers into the supply-chain;
- A major agreement with Tier 1 auto component manufacturers has been concluded that will ensure greater opportunities for black manufacturers in Tier 2 or Tier 3 level;
- R50 billion in investment commitments in the auto sector have been secured;
- A landmark agreement with Stellantis for the construction of a new R3 billion plant in the Coega Special Economic Zone has been reached;
- Semi-knocked down (SKD) production by BAIC, also in the Coega Special Economic Zone, has commenced as a first phase toward more value-additive complete knocked down (CKD) production;
- A new Tshwane Automotive Special Economic Zone has been established, with 10 factories for Ford suppliers already built by March 2024, providing employment to 3 300 workers; and
- The Electric Vehicle Policy was finalised by the dtic; and a new incentive package to assist the transition was announced by the Minister of Finance in the 2024 Budget.
The automotive industry plays a crucial role in our economy, contributing significantly to GDP and employment. The manufacturing component of the auto industry contributed 2.9% of South Africa’s GDP in 2022. With over 115,000 direct employees and an additional 240,000 indirect jobs, the auto industry remains a cornerstone of South Africa’s manufacturing sector.
Despite global challenges such as the COVID-19 pandemic and supply chain disruptions, South Africa’s automotive industry has continued to grow. Over the past five calendar years, South African OEMs produced 2.7 million vehicles and exported 1.7 million vehicles.
In 2023, a record number of vehicles were exported – 399,594 – marking a milestone in South Africa’s industrial resilience and global competitiveness. Notably, in 2023 South Africa exported its 6 millionth vehicle since the start of the democratic era.
For enquiries, please contact:
Bongani Lukhele – Director: Media Relations
Mobile: 079 5083 457
WhatsApp: 074 299 8512
E-mail: BLukhele@thedtic.gov.za
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