According to Reuters, on November 24, Thomas Schaefer, head of the Volkswagen brand, expressed "serious concern" about the future of the company's operations in South Africa. Currently, South Africa is facing ongoing issues such as persistent power shortages and logistics congestion.
In order to improve the group's profitability and remain competitive in the transition to electric vehicles, the Volkswagen Group has implemented a series of cost-cutting measures. The Volkswagen Passenger Cars brand is developing key indicators for a global plan to boost its sluggish profit margins.
Schaefer, during his visit to South Africa, mentioned that factors such as competitive labor costs had once made South Africa an important base for the Volkswagen Group globally. However, additional costs from prolonged power outages, rising labor costs, and congestion in railways and ports have weakened the previously advantageous position. Volkswagen has had a presence in the South African market for almost 80 years.
Schaefer pointed out, "In the end, you have to ask yourself, why are we producing cars in a factory far from the actual consumer market, with weak competitiveness? I am very concerned... we are not here for charity." Schaefer stated that the company's team in South Africa has done its best to overcome challenges, but ultimately, the South African government needs to step in to address the issues.
Last year, Volkswagen's factory in Uitenhage, South Africa, produced about 132,000 Polo and Vivo models, with the majority intended for export. However, these export markets now face greater risks as affluent countries shift towards electric vehicles.
Schaefer mentioned that there are currently no plans to produce electric vehicles in South Africa because the prices of electric cars are beyond the affordability of most domestic consumers. From an environmental perspective, producing electric vehicles for export is also considered unsustainable.
However, Schaefer also explicitly stated that if the local government adopts appropriate policies and leverages the country's proximity to key minerals such as lithium and cobalt, South Africa could potentially become a center for battery manufacturing. "South Africa has a good chance, with enough focus and utilizing the surrounding raw materials, they could be winners," he said.
