VW's R750m Golf 5 deal; Fiat to follow
VOLKSWAGEN SA has landed a contract with its German
parent to manufacture Golf 5 cars in SA, and has launched a R750m
programme to gear up its Eastern Cape plant for the job.
Business Day also understands that Fiat and DaimlerChrysler
are expected to make similar announcements to that of VW in the
next few weeks.
The VW announcement confirms the world's largest
automotive multinationals' solid confidence in SA as a profitable
production base despite the strength of the rand.
The move is also comforting against the backdrop
of the company's earlier announcement that it would invest à
6bn in production by its Chinese joint ventures, as it shows that
SA continues to play an important role in Volkswagen's global network.
The announcement follows hard on the heels of Nissan
SA's launch of an export programme and General Motors' (GM's) takeover
of Delta SA, further underlining global car makers' high regard
for the country.
The benefits of the Motor Industry Development Programme
the government intervention that saved SA's vehicle industry from
collapse play a key role in the attraction of SA. It rewards car
exports based on local content.
A Golf 5 production line is now being installed
at Volkswagen's Uitenhage factory.
Commercial production of the vehicle will start
this year, and will coincide with the phase-out of production of
its predecessor, the Golf 4, which is made at Uitenhage at the moment.
Uitenhage will supply not only SA with the successor
model, but also Asia and, particularly, Japan, which like SA drives
on the right. New VW SA MD Andreas Tostmann said export volumes
would be maintained at between 30000 and 35000 this year.
The SA plant competed against others in the group
for the contract. Tostmann also said the group may consider making
Jettas in Uitenhage.
Fiat, meanwhile, is set to announce next Thursday
that it will produce a right-hand-drive Fiat model for the global
market, with a new investment in SA likely to be worth several hundreds
of millions of rand.
Fiat is expected to make its new export cars at
Rosslyn, where it has a production facility within the Nissan factory.
Fiat and GM , however, have a global tie-up, and
future production might be shifted to GM's Port Elizabeth plant.
