Volkswagen South Africa (VWSA) is doubling the number of vehicles it exports from its plant in Uitenhage, near Port Elizabeth, next year following the securing of an order for 55,000 new-generation Polos for the global market. The contract includes the export of 19,000 vehicles adapted for use in right-hand drive countries to be delivered by the end of this year. VWSA is now the sole supplier of the latest right-hand-drive Polos.
“By the end of 2009, Volkswagen South Africa will have invested R3.5 billion ($470m) in new plant, local content development and new product,” said VWSA’s managing director David Powels.
He made the announcement at the official opening of the Nelson Mandela Logistics Park in Uitenhage, which was held in conjunction with the Coega Development Corporation this week.
“A further R500m will be invested in 2010 to complete the process and ensure that the company is well placed to capture future opportunities both in the South African and global markets,” said Powels.
Construction for the logistics park began in March 2005 under the direction of the Nelson Mandela Municipality, but last year, the municipality handed over the management and development of the park to Coega Development.
In terms of inbound logistics, the park is facilitating a greater localisation of component sourcing for VWSA as the company pursues a goal of 70% localised supply. The company says it has brought geater efficiency to Polo production in South Africa.
"One of the biggest cost-drivers in automotive production in South Africa is the logistics costs," VWSA spokesman William Stephens told Automotive Logistics. "Having localised big parts like bumpers, dashboards and door trim panels saves us huge amounts in seafreight costs and, in some cases, airfreight costs. Another plus is that it gives us greater flexibility to respond to customer requirements at short notice."
Five international component manufactures have built plants at the park: Faurecia Interior Systems, Grupo Antolin, Flextech, Benteler Automotive and Rehau. These companies have invested approximately R600m on buildings and equipment and are helping to bring local content for the vehicle up from 40% to 74% by the end of next year. Up to 77% of suppliers to VWSA are now based at Nelson Mandela Bay.
Volkswagen is exporting the new Polo hatchback to markets including the UK, Ireland, Australia, New Zealand, Malaysia and Singapore.
The company will only produce two models at Uitenhage following the closure of its Citi Golf range. The model that will join the Polo has yet to be announced.
"We have now converted to being a small-car plant with less platforms to achieve higher economies of scale, decrease complexity and increase productivity," said Powels.
