Volkswagen South Africa has been awarded a R12 billion contract to supply the Volkswagen Group with diesel particulate filters (DPFs) for the next five years.
The motor giant will embark on a partnership with local catalytic converter and exhaust systems manufacturer Eberspächer South Africa.
Volkswagen SA's managing director David Powels said the deal was one of the biggest export contracts for a single part ever awarded to the company. "Furthermore, it is a coup for the South African automotive component industry."
Collectively, Volkswagen SA and Eberspächer SA will invest about R55million in tooling and equipment to manufacture the parts.
In addition, the investment in the national supplier base will be about R26million.
About 80 percent of these suppliers are based in the Nelson Mandela Bay region.
The new contract will secure more than 100 jobs in the region. Intensive training of operators and personnel will be undertaken to ensure that international standards on DPFs are met.
Volkswagen South Africa and Eberspächer SA are at the forefront of DPF manufacture, having secured access to the most modern manufacturing method - known as calibrated stuffing - which encompasses new laser techniques.
"This is the benchmark in the Volkswagen Group and will benefit the South African catalytic converter industry as a whole," said Powels.
Production will begin in November.
The parts will be shipped to Volkswagen's Kassel plant in Germany, where they will be completed and sent to user plants in Volkswagen's global network.
Eberspächer SA managing director Henry Eksteen said: "We are proud to be involved in this joint programme with Volkswagen SA and look forward to further enhancing our presence with global platforms such as this one."