Positive signs, but Middle East creates uncertainty
The Automotive Business Council | naamsa says in reaction on new vehicle sales in February that the economic environment remains supportive.
- Industry News
- 3 March 2026
Volkswagen’s team in South Africa has done what it can to overcome what VW AG’s CEO of Passenger Cars Brand, Thomas Schäfer, called an "uphill battle", and ultimately the South African government needs to step up to solve the problems.
These strong words and warning about the future of the company's operations in South Africa were made against the background of the situation of the manufacturer’s plants in Europe. Issues regarding high costs and low productivity in Europe make Volkswagen’s cars uncompetitive, according to news reports. This will lead to staff reductions in Europe as part of a savings programme it was announced.
About the current situation in South Africa, Thomas said during a visit to the country that the German automaker has been in South Africa for nearly 80 years. “Factors like competitive labour costs once placed it among the company's higher-ranking bases globally.
“But the cost of debilitating power outages caused by chronic production shortfalls at state-owned utility, Eskom, as well as rising labour costs and logjams on railways and at ports have eroded that advantage.
“Eventually you have to say, why are we building cars in a less competitive factory somewhere far away from the real market where the consumption is? I'm very worried about it... We are not in the business of running a charity," he says.
Volkswagen produced some 132 200 Polo and Vivo models at its South African facility in Kariega (formerly Uitenhage) last year, most of them for the export market.
Those export markets are now at risk of disappearing as wealthy countries move to electric vehicles (EVs). The European Union and Britain are planning to ban the sale of new internal combustion vehicles from 2035.
Thomas said there were no current plans to introduce EV manufacturing in South Africa, since electric cars are currently priced out of the reach of most domestic consumers. Producing them for export would not be environmentally sustainable.
“However, with the proper government policies aimed at leveraging the country's proximity to critical minerals like lithium and cobalt, it could become a battery-manufacturing hub. There is a realistic chance that South Africa, with enough focus, with all the raw materials in the neighbourhood, could be a champion," Thomas says.
The Automotive Business Council | naamsa says in reaction on new vehicle sales in February that the economic environment remains supportive.
The new vehicle sales impetus that gathered steam in the second half of 2025 is continuing into 2026 with sales of 53 455 units being the highest reported since February 2013 and 11.4% higher than the figure for the same month a year ago.
TVS Motor Company (TVSM), one of the world’s largest two-wheeler manufacturers, has re-launched in South Africa through a distribution partnership with The Nexus Collective.
Advertisement
Advertisement
You can't buy happiness but you can buy cars and that's kind of the same thing.
Unknown
The Automotive Business Council | naamsa says in reaction on new vehicle sales in February that the economic environment remains supportive.
The new vehicle sales impetus that gathered steam in the second half of 2025 is continuing into 2026 with sales of 53 455 units being the highest reported since February 2013 and 11.4% higher than the figure for the same month a year ago.
TVS Motor Company (TVSM), one of the world’s largest two-wheeler manufacturers, has re-launched in South Africa through a distribution partnership with The Nexus Collective.