Government is committed to the automotive industry

Friday, January 26, 2018

Government remains committed to the production of vehicles locally through the Industrial Policy Action Plan (IPAP) says Trade and Industry Deputy Minister Bulelani Mangwanishe.

“As the government, our commitment to local vehicle production is supported in our Industrial Policy Action Plan (IPAP) with a prime focus on adding value in the manufacturing and industrial sector. Export promotion, job creation and inclusive growth remain as the fundamentals of this policy,” said the Deputy Minister this week.

This as German car manufacturer, Volkswagen South Africa (VWSA), released its latest model of the Polo on Wednesday night.

Deputy Minister Magwanishe commended VWSA on the launch of the new hatch and its investment of R6.1 billion.

“This investment is particularly relevant to ensure expansion, socio-economic impact and the inclusion of black industrialists,” said the Deputy Minister at the launch at the manufacturer’s plant in Uitenhage, in the Eastern Cape.

The car manufacturer not only showed off the new model at the launch but also showcased the R6.1 billion investment in its plant and new products in the presence of the Deputy Minister and Eastern Cape Premier Phumulo Masualle.

In August 2015, VWSA Chairman and Managing Director, Thomas Schaefer, announced an investment of around R4.5 billion in new product and facilities. The total investment exceeded R6.1 billion, which is partially due to exchange rate fluctuations and the approval of additional plant investments.

The majority of the investment spend was on capital expenditure for production facilities, local content tooling, quality assurance and manufacturing equipment as well as information technology upgrades.

“Localisation remains a key priority for VWSA, with the new models at a 60% local content level, with on-going plans to achieve higher levels,” said Schaefer, adding that the company believes in the long term future of South Africa and the continent.

“For this reason the Volkswagen Group has created its fourth international region; the Sub Saharan Africa Region with VWSA being fully responsible for the region which will have substantial benefits for our company in South Africa. 

“I believe that there are truly unique opportunities for us as an industry that we need to grasp, specifically here,” said Schaefer.

The plan, which is a key component of the Nine-Point Plan, aims to develop a more competitive and diversified economy with a higher global share of products. –


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