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.
Europe’s used electric vehicle (EV) market is experiencing a notable surge as the Iran conflict drives up global oil prices and pushes petrol costs sharply higher across the continent.
Geely Auto has been recognised in the S&P Global Sustainability Yearbook 2026 (Global), marking a significant milestone for the brand’s global sustainability efforts and the first and only Chinese vehicle manufacturer to make the list.
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I have bad reflexes. I was once run over by a car being pushed by two guys
Woody Allen
Geely Auto has been recognised in the S&P Global Sustainability Yearbook 2026 (Global), marking a significant milestone for the brand’s global sustainability efforts and the first and only Chinese vehicle manufacturer to make the list.
Volkswagen Motorsport driver Jonathan Mogotsi has earned his Nürburgring Permit A ‘Ring Licence’ to qualify to race in the legendary circuit’s 24-Hour from 18 – 19 May 2026.
While the decision to keep the repo rate unchanged offers a degree of short-term stability, if current global events continue for the long term, the prospects for a prolonged high-interest rate environment will place significant pressure on consumer affordability and, in turn, vehicle retail activity.
