Germany-based automobile manufacturer Volkswagen has announced plans to invest R4bn ($210m) at its manufacturing plant in Kariega, South Africa.

The investment is to upgrade and modernise the plant’s facilities, with a provision to support the future production of a new SUV-type model from 2027.

The bulk of the investment will be spent on production facilities, manufacturing tooling, local content tooling and quality assurance. A significant portion of this investment (over R850m) will focus on automating the body shop and buying new equipment for the press shop (over R400m).

The Kariega plant manufactures two models, the Polo and Polo Vivo, with the planned SUV to be its third. The pre-production phase for the new SUV will also include training and upskilling opportunities for the group’s employees.

Martina Biene, president and managing director of Volkswagen Group Africa, said: “While most global automotive markets are switching to electric vehicles, African markets like South Africa will continue to manufacture and sell internal combustion engine vehicles. This is due to customer demand for internal combustion engines and the slow introduction of electric vehicles in these markets.”

“Plant Kariega is an important manufacturing plant within the Volkswagen Group production network. Since 2011, Volkswagen has invested R10.28bn in production facilities, manufacturing equipment, local content tooling and training of people. The new investment is a vote of confidence in the future of the plant. It also futureproofs jobs, not only for our people but also those employed in our supplier network.”

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This is Volkswagen’s second investment in Kariega of late. In February, it opened a new R20m airbag deployment centre at the same site.

Headquartered in the German city of Wolfsburg, Volkswagen manufactures passenger and commercial vehicles, motorcycles, engines and turbomachinery. It has around 676,000 employees globally.