Cynical VW smelt the gas, and said ‘no thanks’
It took me a while to understand the problem with the Volkswagen (VW) announcement earlier this month that it plans to spend R4bn at its plant at Kariega, in Nelson Mandela Bay, to build a new car. It’ll soon be building a new SUV at the plant, in addition to the Polos and Vivos it already makes there.
Production of the Polos and Vivos stops in 2030. VW was unable to say what, if anything, might replace them. My own hope is a decent VW half-ton bakkie. Who can live in a country, as we soon will be, that doesn’t make one?
But what was so clear after the VW PR machine had done its thing is that the company had clearly decided not to make electric vehicles (EVs) here. The petrol and diesel SUV it will make will use the Polo chassis, as does the T-Cross. But it’ll be more basic. For a more basic market.
The VW decision came just 18 weeks after the minister of trade, industry & competition, Ebrahim Patel, had, after endless delay, released his White Paper, his final thoughts as it were, on the production of EVs in South Africa. Patel, typically loquacious, said his paper was “a product of constructive engagement with stakeholders, including within government, industry and labour, to chart a viable and sustainable transition path for the [auto] industry”.
The industry, desperate to plan ahead, had been calling for it for ages, but when it landed VW obviously had a quick read and decided “thanks, but we’ll pass”. In record time it conjured up a lesser scheme for South Africa and for the next decade it’ll dump its old tech production here. It didn’t stop Patel from welcoming the announcement as “testament to the company’s confidence in our country”. It wasn’t.
I’m sure that heretical thought will have hands reaching for the complaints department but the VW decision is very perceptive and deeply cynical. We ask for this by our own lack of economic ambition, all neatly summed up by our approach to energy, where, despite modest progress in installing big renewable wind and solar plants, we have now run out of transmission capacity.
Energy minister Gwede
Mantashe, a fossil junkie, has more or less free rein now, and not only to take
Eskom under his dark wing; he is actively punting the large-scale use of natural gas as a
“transition fuel”.
Natural gas is still a polluter, perhaps not as bad as coal. And
Mantashe’s plans, supported by people, already in fossil fuels, such as Shell and TotalEnergies, pour in behind. Either unaware, or chasing an easy buck, they cheer him along in newspaper columns and conferences.
They are comforted in this by new natural gas investments in Western Europe that appear to go against the greener grain. But those governments are merely scrambling to live without the Russian gas they’d become addicted to before the invasion of Ukraine. Europeans, VW being one of them, know full well that future markets are going to demand greener product. We may help them tick over with old internal combustionengined cars for a while but it’s a short game.
And if we start building gas infrastructure here it’ll end up either stranded as we chase picky rich markets with our dirty products or we’ll have to sell into cheaper markets, for less money and less benefit. Markets in Europe, Asia and the Americas are going to be demanding green product long before we are ready to supply it, given the way we are going.
“Our research suggests we’re on the brink of a major shift in consumption patterns,” warned a prescient piece in the Harvard Business Review (HBR) last September. “We’re fast approaching this tipping point where sustainability will be considered a baseline requirement for purchase, and companies should prepare now.”
Governments too, and where they resist, future voters will simply remove them. The HBR reporters calculate the purchasing power of Generation Z (born roughly 1996-2010) and Millennials (1983-1993) would overwhelm us baby boomers (1946-1964) by 2030 — that’s tomorrow — with up to $68-trillion (R1,280-trillion) transferring to the younger generations. They want to save the earth from the mess we made of it. Consumer reports throughout the industrial world confirm the same thing.
You can sneer at the new woke generations coming up behind you but you can’t force them to buy an orange irrigated at the end of a filthy chain of fossil-fuelled electricity or drive a car that belches much the same. Even thinking about gas here as an alternative new or transitional fuel is just madness.
We’re out of our depth industrially as it is and we should try reasonably hard not to make things worse.
The industry, desperate to plan ahead, had been calling for it for ages but when it landed VW obviously had a quick read and decided ‘thanks, but we’ll pass’