Name of the Project
Volkswagen Kariega manufacturing plant upgrade.

Location
Kariega, in the Eastern Cape, South Africa.

Project Owner/s
Automaker Volkswagen Group Africa.

Project Description
Volkswagen announced an investment in its Kariega manufacturing plant in April 2024.

The investment is aimed at preparing the plant to manufacture a third model from 2027. The model, which will be a sports utility vehicle (SUV), will be manufactured on the same production platform as the Polo and Polo Vivo – Volkswagen’s top-selling passenger car brands in South Africa.

Volkswagen Brazil lead the design and development of the new SUV. However, Volkswagen Group Africa’s engineering team collaborated with its Brazilian counterpart to adapt the new model to local and continental requirements such as the development of a right-hand-drive version.

It is highly likely that the South African equivalent of the Tera will be Volkswagen's most affordable SUV in the local market.

The bulk of the investment will be allocated towards production facilities, manufacturing tooling, local-content tooling and quality assurance. Nearly R877-million will be spent to enhance automation in the body shop and R418-million will be used to buy new press tooling for the press shop.

Potential Job Creation
Polo and Vivo have 46% and 58% local-content levels respectively. The trend is set to continue with the new model, which aims to achieve an estimated 40% local content through a R1.2-billion investment.

Capital Expenditure
R4-billion.

Planned Start/End Date
Production is planned to start in 2027.

Latest Developments
Volkswagen lifted the veil on its new, compact SUV that will be built in South Africa from 2027, as part of its previously announced investment in the Kariega plant on March 4.

The third model – called Tera in Brazil –  will be manufactured on the same production line as the Polo and Polo Vivo. In South Africa, four African-inspired names have been shortlisted for the upcoming SUV. Volkswagen South Africa will ask the public to vote for one in a soon-to-be-launched publicity campaign.

The plant has started press shop and body shop integration, with an additional plant shutdown planned from April to  May.

So far, R1.6-billion has been spent to localise content for the new model.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Volkswagen Group Africa head of group communications Andile Dlamini, tel +21 41 994 5042 or email andile.dlamini@vwsa.co.za.