Volkswagen cements its commitment to South Africa as an investment destination

South Africa is undoubtedly the most preferred location for multinational investors in Africa. As one of the most diversified and industrialised economies in Africa, the country’s well-established infrastructure and strategic location, positions South Africa as a key global hub. Global brands recognise the wealth of opportunities the country has to offer. The young labour force supported by  a world-class infrastructure and financial services sector, place South Africa at an enviable position than most countries on the continent.

Volkswagen is one of the largest and longest investors in South Africa and is a major contributor to the country’s foreign direct investment. Recently, this  leading German manufacturer announced  South Africa as an exclusive VW Polo manufacturer in the world, indicating their continued investment into the country.

The Volkswagen Group Africa recently celebrated a milestone when the 1.5-millionth vehicle built for export in their Kariega plant in the Nelson Mandela Bay Metro was rolled off the line. The plant, which has been building Volkswagens since 1951, produces 710 vehicles per day. The plant currently builds the Polo Vivo and is the sole manufacturer of the Polo GTI,  exporting to 38 markets worldwide. Last year, the  according to Volkswagen South Africa, the plant’s record for export units in one year was in 2019, when they built 108 422 vehicles for export markets.

With the recent announcement of VW South Africa being the sole manufacturer of the Polo Hatch, covering both left- and right-hand drive, the brand has cemented its commitment in a market that it has dominated since 1992 with models such as VW Jetta and Golf.

“Celebrating another production milestone this early in the year sets the tone for a successful 2024,” said Ulrich Schwabe, Volkswagen Group Africa Production Director. “Volkswagen Group Africa remains a strong player in the export space and I am proud of the team behind milestones such as these. As the home of Polo, we intend to continue building and delivering our high-quality vehicles to customers around the world – and hopefully achieve many more milestones along the way.”

More than 180 Fortune Global 500 companies have invested in South Africa, the largest concentration in Africa. Last year, Stellantis NV, a multinational automotive manufacturing corporation, formed from the merger in 2021 of the Italian–American conglomerate Fiat Chrysler Automobiles and the French PSA Group, committed to invest 3 billion rand ($160 million,) to develop a new vehicle manufacturing facility in South Africa. The  manufacturer of  Alfa Romeo, Chrysler and Jeep, is currently building a factory in the Eastern Cape, which is scheduled for completion by the end of 2024

All these key investments continue to unfold in the context of South Africa being consistently among the top beneficiaries of the African Growth and Opportunity Act (AGOA), a cornerstone that provides African companies and workers from 32 countries ,duty-free access to our market for more than 7,000 products. More than 600 American businesses now operate in South Africa.

To this end, South Africa continues to support industries with high growth potential such as the automotive industry, clothing and textiles, gas, chemicals and plastics, renewable energy, and agriculture. For global brands such as Volkswagen, the country’s 13 special economic zones provide targeted investment incentives, preferential tax rates and export support. Exporting the Volkswagen Polo Hatch to global markets will be a seamless journey that cements South Africa’s relationship with Volkswagen as a group and sustains the legacy of the country being truly the home of Polo.

Article supplied by Brand South Africa, the official marketing agency of South Africa, with a mandate to build the country’s brand reputation, in order to improve its global competitiveness.