Investment announcement good news for entire industry
In the constant drive to bolster exports from our great Nelson Mandela Bay, the investment announced by Volkswagen Group Africa this week sends a strong message of confidence to existing and emerging exporters.
To invest R4bn towards introducing a new model to be manufactured in their Kariega plant shows that Volkswagen believes in the potential of this region and in its value as a base from which to export.
Volkswagen currently exports its Polo model to 38 markets across the world, and from July will be the sole manufacturer of all the Polos in the world.
It speaks volumes to see this vote of confidence from a brand which has been exporting from this region for the past 32 years, and which has been privy to most — if not all — of the challenges that exporters face in getting their product from A to B.
Alongside guests including Eastern Cape premier Oscar Mabuyane, Nelson Mandela Bay mayor Gary van Niekerk, and trade, industry and competition minister Ebrahim Patel, I was happy to attend the investment announcement on Tuesday and learn first-hand about Volkswagen’s plans.
What is particularly heartening is its commitment to prioritise localisation when it comes to procuring parts for the new model it plans to introduce in 2027.
The Polo and Polo Vivo being built in Kariega currently boast a high level of local content and the brand intends to follow suit with the third model — thereby ensuring that its sizeable investment not only benefits the larger economy, but directly benefits and empowers local businesses downstream.
I firmly believe in the power of smaller exporters and the role they must play in the economy; however, the titans have the capabilities and the resources to boost an entire industry, and an investment of this size has the potential to ripple wide in terms of enabling growth in exports.
Not only will it mean export volume for Volkswagen itself, but it could empower an emerging component manufacturer, for example, to supply parts for multiple OEMs and even export their products as well.
Another piece of good news is the job security that comes hand in hand with the announcement.
Volkswagen intends to upskill its current employees in preparing for the new model, while the investment brings a level of security to those employed in the supply chain as well.
Considering that our automotive hub in the metro accounts for about 41% of employment in the South African automotive industry, the people who build cars and components should be a primary consideration when it comes to any advances made in the industry.
Of course, Volkswagen is not the first company recently to announce an investment in the region.
Stellantis’s R3bn investment in a local manufacturing plant made headlines not too long ago, and then there is the considerable impact of the Hive Energy green hydrogen and ammonia facility in the Port of Ngqura — accounting for an investment of R105bn.
It is encouraging, to say the least, to see the faith that major multinational companies are placing in Nelson Mandela Bay and its export capabilities.
As it has done for nearly 44 years, Exporters Eastern Cape will continue to offer its support wherever possible and necessary to exporters large and small who play their part in showing the world what our metro is capable of.