Volkswagen South Africa has secured a major worldwide right-hand drive export deal for the new Volkswagen Polo that will be worth about R27-billion over the next six years.
David Powels, VW SA's MD, said that the contract would double the Uitenhage company's exports from about 28 500 cars in 2009 to 55 000 in 2010 and create hundreds of direct jobs.
The value of the contract was subject to volumes remaining at about 55 000 cars a year for the duration of the contract.
Powels said the export deal was secured as a result of a multibillion-rand investment programme by VW SA and its component suppliers
Right-hand drive deal will double Uitenhage's exports.
Investments totalling R600-million by five car-parts suppliers in new factories at the Nelson Mandela Bay Logistics Park in Uitenhage to support VWSA's export contract will create 685 direct jobs by June 2010.
The investments, by Rehau, Benteler, Flextech, Faurencia and Grupo Antolin, were key factors that enabled VW SA to seal the deal. Powels said the four companies would contribute significantly towards VW SA increasing the local content of the new Polo to 74 percent by the second half of 2010 from less than 40 percent today.
By the end of 2009 VW SA will have invested R3.5-billion in new plant, local content development and new product. R500-million more will be invested in 2010 to complete the process and ensure that the company is well placed to win future opportunities in the domestic and global markets
VW has invested R3.5bn in plant and local content.
The new Polo will only be launched in South Africa early in 2010, although production started at VW's plant in Uitenhage in July 2009. More than 10 000 have already been exported; the total by the end of 2009 could reach 19 000 for nine key markets – Britain, Southern Ireland, Japan, Australia, New Zealand, Malaysia, Singapore, Cyprus and Malta.
Powels said the establishment of the NMB Logistics Park had been a crucial step to help VW SA become a globally competitive maker of vehicles in the Eastern Cape. Almost 80 of the company's suppliers were now based in Nelson Mandela Bay, a critical factor in VW SA's globalisation strategy.
He also explained that in 2008 the South African automotive industry was 28 percent more expensive than Western Europe but that the real challenge was to match the cost-competitiveness of India, China and eastern Europe which were substantially more cost-competitive than Western Europe. - Business Report
Investment by VWSA in its plant in the past 18 months:
R780-million - body shop automation up 30 percent to 65 percent.
R400-million - engine plant to secure its future.
R400-million - final assembly plant.
R100-million - renovating logistics facilities.
R80-million - production support areas.
R40-million - increased automation at its press shop.
R40-million - wheel and tyre assembly plant.
R25-million - training academies.
Large but confidential amount in quality measurement facilities.
New investments by component suppliers to VWSA
R220-million - Rahau, 130 jobs.
R180-million - Bentler, 250 jobs.
R100-million - Grupo Antolin, 24 jobs.
R90-million - Faurencia, 140 jobs.
R3-million - Fextech, 40 jobs.
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