German multinational automotive manufacturing company, Volkswagen plans to produce a record number of vehicles in South Africa.
Despite a sluggish economy and other hurdles in the Southern African country, the German carmaker will increase its output by 28 per cent.
According to Volkswagen Group South Africa managing director, the firm will manufacture 161,900 vehicles this year with 108,000 destined for export.
“We are already small with about 600,000 car production – that’s too small to be relevant on the global scale. Production should be a million, a million and a half per year, then you’re sort of sustainable like Thailand, but 600,000 is not enough. So you don’t wanna shrink this, you wanna grow this and that’s the whole purpose of this new automotive master plan that we’re working on – grow this market and we can have proper sustainable localisation of components, we have deep manufacturing in this environment, but shrinking doesn’t help,” said Thomas Schaefer.
Volkswagen has been seeking to diversify sales on the continent, whose auto market has seen slow growth in the past three years.
“Let’s find those country’s who want to make a difference. Rwanda being the first, Kenya the next, Ghana came up, Nigeria. So, yeah there might be disruptance here and there – politically-induced or elections or whatever is happening but these countries are eager to make a change and they much rather work with those and get it done and then we go from there to the next.” Schaefer said.