ohannesburg - Volkswagen South Africa (VWSA) has unveiled a R230m distribution centre in Centurion and announced a commitment to spend a further R500m on production facilities in South Africa.
Volkswagen CEO Martin Winterkorn said that South Africa was key in the German-based company's ambitious plan to become the biggest automotive group, measured by sales, in the world by 2018.
VWSA's new parts distribution plant will replace the existing facility in Roodekop, which will be closed down. All staff will be relocated to Centurion, where they will be retrained to handle the newer and more sophisticated logistics system.
The plant measures 26 000m2 and can be expanded by another 18 000m2.
This facility is part of the R4bn VWSA has invested in South Africa over the past two years. The bulk of these investments has been at the company's manufacturing hub, Uitenhage.
"We have also created 1 000 new jobs through our activities," said Winterkorn, who addressed media and stakeholders at the plant's official opening in Centurion on Thursday.
"A further 600 jobs have been created by five new suppliers stationed at the Nelson Mandela Bay Logistics Park," he said.
VWSA plans to double its local production volumes in 2010 to 120 000. About two-thirds of these cars are destined for the export market.
VWSA already has a strong grip on the passenger car market thanks to the new Polo and the entry level Polo Vivo, which was South Africa's top-selling passenger car in May, according to the National association of Automobile Manufacturers SA (Naamsa).
The company now plans to increase its reach and gain market share over key competitor Toyota in the light commercial vehicle sector through the introduction of the Amarok - VWSA's first attempt at the one ton pick-up product.
Amaroks are being manufactured in Argentina and will be available in South Africa in the final quarter of 2010. The vehicle is positioned directly against the current market leader - Toyota's Hilux.
Local content boost
Meanwhile, Trade and Industry Minister Rob Davies commended the company for increasing the locally manufactured content in South African-assembled vehicles to over 70%, from the historic 40%.
"This is of great significance; it's exactly the direction we want the industry to move," said Davies.
Low local content levels in South African-manufactured cars is one of the biggest challenges facing the viability of the automotive industry.
Deputy President Kgalema Motlanthe said that while higher levels of local content were "encouraging", the industry still has a way to go when it comes to empowerment, skills training and procurement of supplies from black-owned entreprises.
VWSA MD Dave Powels, who is also Naamsa president, said the industry was aware of these shortfalls and would endeavour to find solutions.
The government's recently introduced industrial plan - the Automotive Production and Development Programme (APDP) - offers numerous incentives to manufacturers which raise their local component ratios.
The APDP also includes incentives to attract automotive investment in South Africa, as opposed to other burgeoning markets in South America and Asia.
Three major automotive manufacturers, including VW, have announced investment plans in South Africa to the combined value of R9bn over the past 18 months.
"None of these investments happened by accident," said Davies. "Most of them happened in anticipation of the APDP."
- Fin24.com