VWSA addresses exit rumours

Volkswagen South Africa (VWSA) this week addressed speculation that it plans to exit the market.

A report based on a Reuters interview with the global CEO of the German passenger cars brand, Thomas Schäfer, sparked rumours that the company would be leaving the country.

While Schäfer expressed worry over the future of its local operations, citing electricity supply disruptions and logistical impediments related to national railways and ports networks as major concerns, he did not explicitly state intentions to disinvest.

Tebogo Losaba, media and public relations manager at VWSA, responded to our inquiry for clarification.

"Please note that the story is a misrepresentation of the interview Thomas Schäfer had with Reuters last week Friday," Losaba commented. "He mentioned in the interview that HQ is still committed to SA but that part was not included in the story for some reason."

Losaba confirmed that VWSA currently employs 4,000 people, a combined figure between its Kariega, Eastern Cape, manufacturing facility and offices in Johannesburg.

In the Reuters interview, Schäfer was quoted as saying: "Eventually, you have to say, why are we building cars in a less competitive factory somewhere far away from the real market where the consumption is?

"There's a realistic chance that South Africa, with enough focus, with all the raw materials in the neighbourhood, they could be a champion."

In addition, Schäfer noted that national government needed to provide solutions. The Kariega plant currently produces the Polo Vivo and Polo. The latter is also built for export, to as many as 38 countries. In December last year, the plant achieved a significant milestone, with the two-millionth Polo unit rolling off the production line, since Polo production first began in 1996. 

In the Reuters interview, Schäfer said there were no plans at present to manufacture electric vehicle (EV) models in Kariega.

Schäfer is no stranger to the local market and its challenges, having served as chairman and managing director for VWSA from 2015 to 2020.

Among the triumphs of his tenure was promoting the expansion of Volkswagen into markets including Rwanda and Ghana. Earlier in his career, he worked at Mercedes-Benz South Africa (MBSA), with a stint at their East London plant as quality and vehicle assembly manager.