Volkswagen Group South Africa is to produce a model locally that is aimed at export to the African market.
Volkswagen already exports 70% of the vehicles produced at its Kariega plant in the Eastern Cape.
The latest move was in line with a shift in its export focus from Europe to Africa, the German automotive giant said in a statement.
This will require significant investment in its plant.
This investment announcement comes after the company’s passenger brand chief executive officer, Thomas Schaefer, said in December last year that he was “very worried” about the future of the company’s operations in South Africa, in light of persistent power cuts and logistics challenges.
Volkswagen South Africa (VWSA) managing director Martina Biene said recently that its biggest competitors were the other 117 VW plants globally, and not its competitor brands in the marketplace.
She said at the time that VW was passionate about South Africa, but there came a moment when you could not sell to your headquarters that you must spend R150 million on generators to guarantee power and outlay additional money for road transportation because the rail infrastructure was not functioning properly.
