According to media reports, Volkswagen announced on April 16 that it plans to invest 4 billion rand (approximately $210.67 million) in its factory located in the Eastern Cape province of South Africa. The company is preparing to start production of a new SUV at the South African factory from 2027.
In a statement, Volkswagen mentioned that this investment will be used to upgrade facilities in various areas, preparing for the addition of a third model to its production lineup starting from 2027. South Africa is the largest automotive manufacturing center in Africa, with global brands such as Toyota, Isuzu, Volkswagen, and Mercedes-Benz having factories there.
Volkswagen stated that the first phase of upgrades to the Kariega facility in South Africa will begin during the factory shutdown at the end of 2024. The factory currently produces Polo and Polo Vivo models. Since 2011, Volkswagen has invested 10.28 billion rand in the Kariega factory.
The design and development of this new SUV are being led by Volkswagen's Brazil division, which will collaborate with the group's African engineering team to adjust it according to local and continental requirements, such as right-hand drive. The company has not disclosed the name of the new SUV.
Martina Biene, Chairperson and Managing Director of Volkswagen Group (Africa), stated, "With most global automotive markets transitioning to electric vehicles, African markets like South Africa will continue to produce and sell internal combustion engine vehicles in the foreseeable future."
Biene mentioned that the new model might also be sold in other African markets. Apart from the new model, Volkswagen will also deploy its ID.4 test fleet in South Africa and Rwanda.
Biene added that this investment is driven by customer demand for internal combustion engine vehicles and the relatively slow pace of electric vehicle adoption in these markets.
EU countries have committed to ending sales of new carbon-emitting vehicles by 2035, while the United States aims to increase the sales share of pure electric vehicles to up to 35% by 2035.
