Johannesburg - Increased production for the export market by Volkswagen South Africa’s (VWSA) engine plant in Uitenhage has resulted in it moving to a four-shift 24-hour a day, seven days a week operation and the creation of between 50 and 60 temporary jobs.
David Powels, VWSA’s managing director, said yesterday that production at the plant had increased by 37 percent to 151 269 engines last year from 110 708 in 2012 and was projected to grow by a further 14 percent to 172 873 engines this year.
He said the dominant percentage of the plant’s volume was export orientated, largely going to India and China.
Powels said the fourth shift was installed from October, adding that it was significant that it was at this level of operating in a generally quite depressed automotive market.
Of the plants’ total production this year, 73 448 engines have been allocated to India, 46 765 to China, 45 172 to South Africa and 7 488 to Malaysia.
Powels confirmed that the four-shift operation had created between 50 and 60 temporary jobs, but stressed that engine machining was an automated process and engine assembly a less labour-intensive process.
He said Volkswagen did not intend to try and break the production bottleneck in the short term at the plant with further investment. “We’d rather sweat the assets we have with innovation around the working patterns. It’s too expensive to create new capacity.”
Powels said the Volkswagen passenger car brand sold 81 835 units in South Africa last year to achieve an 18 percent market share, the third-highest market share for the brand worldwide after Brazil and Germany.
Between the Volkswagen and Audi brands, it achieved a market share of 22.9 percent in South Africa – the highest market share in its history and made it the South African passenger car market leader.
Volkswagen achieved a 44.1 percent market share in the sub A-segment with its Polo and Polo Vivo models and 27.5 percent in the A-segment with its Golf and Jetta models.
It did not compete in the entry-level segment, but Powels indicated it would at some stage have to enter this segment if it wanted to remain a dominant player in the local market. However, he said VWSA did not have any definitive plans to enter this segment at this stage.
Powels said VWSA would also like South Africa to be considered as a production location for the second generation Amarok, but there was not any firm planning around this yet.
“Commercial vehicles have a significantly longer life cycle so there is quite some time to go. But we are keeping that on the radar screen because we believe there is demand for a robust one-ton affordable pick-up in South Africa and sub-Saharan Africa,” he said.
Powels played down suggestions VWSA’s parent company lacked trust in South Africa to allow it to produce this vehicle.
He said the group tended to take a long-term view and was very vigilant and watching the political, economic and labour situation very carefully in South Africa.
“But we don’t want to be seen as an organisation that reacts spontaneously to a short-term situation. The duration and multiplicity of the strikes last year was difficult for anyone to understand, but it’s not causing us to question fundamentally [whether] we want to do business in South Africa.
“It’s definitely an issue but it’s not a question that is such a big issue that at this stage we will put future plans on hold,” he said. - Business Report