Volkswagen Group Africa (VWGA) MD Martina Biene used the annual VW Indaba event to kick off the company’s official 75th annivessary celebrations, but also to sound a warning bell to South Africans that all is not well.
Biene, who became the first woman to lead the local company in November 2022, outlined both bleak and prosperous news for the company, citing the government’s delay in finalising and legislating change to future proof not only her company but also the rest of the local vehicle manufacturing brands.
Her main concerns are the government’s seeming lack of urgency in the completion of tweaking the APDP [Automotive Production Development Programme] for new energy vehicle (NEV) investment, and facilitating a differentiated ad valorem tax that favours locally built NEVs as risking the future prospects of the company.
The VWGA Kariega plant is the sole exporter of the Polo in the world since 2024, sending the model to 38 markets, mainly in the EU and UK. She says the plant will produce Polo mild-hybrid (MHEV) derivatives in 2027, and maintain the EU as an export destination until 2035 when the internal combustion Polo will be phased out, likely transitioning towards full-electrification.
With the global company planning to introduce its first plug-in-hybrid model in 2027 and others, Biene says she and other VW regional heads have to present and compete for new business for their plants to the VW board. Uncertainty about South Africa’s NEV legislation hobbles Kariega’s chances of securing NEV production schedules with the white paper not finalised, which she hopes will include the minerals beneficiation for the local assembly of NEV batteries.
Biene says her efforts in remedying the situation include writing to President Cyril Ramaphosa personally to highlight the challenges and urge him to negotiate with the EU and UK markets to secure market access for locally-built NEVs.
The low quality of fuel and the adulteration of diesel, in particular, in South Africa are part of the concerns the company has, and a VW expert highlighted how this limits the number of models and builds that Kariega can secure that will ultimately benefit local consumers.
The influx of affordable Chinese models is also adding to the local-built challenges. Biene has a similar view to BMW SA and Naamsa head Peter van Binsbergen that the proposed hikes in tariffs on cars imported into South Africa will have an unintended and negative impact on affordability and the local automotive industry, which supports more than 500,000 employees.
In a recent parliamentary sitting, deputy trade minister Zuko Godlimpi told legislators his ministry is reassessing hiking tariffs, which could be up to 50% on imported vehicles.
Business Day
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