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Johannesburg - German carmaker Volkswagen will axe 400 jobs in South Africa as it scales back production due to falling demand in its home market and for exports.
The company said in a statement it would halt production in the last week of February and during the weeks before and after the Easter weekend and will lay off 400 workers on a voluntary basis.
Volkswagen stressed the short-term fall in demand did not affect its commitment to South Africa adding it would not alter its plans to invest in technology in the next two to three years and to make more car parts in the country.
Volkswagen exported more than a third of the 92 000 vehicles it produced in South Africa last year.
It said it expected the total domestic vehicle market, which has taken a hit as consumers in Africa's biggest economy rein in spending to cope with higher borrowing costs, to decline by 10% in 2009.
Carmakers globally are seeing sales tumble as recession and a lack of credit keeps buyers from showrooms, and have been cutting production and jobs.
- Reuters
