Volkswagen tells Ramaphosa new bakkie investment depends on urgent policy shifts

Volkswagen AG is thinking about making a little truck in South Africa. They already said yes to the idea at their office, in Wolfsburg but they still have to decide if they really want to spend the money. The company says that the way thingsre now it is hard to make the numbers work for the new Volkswagen pick-up. Volkswagen AG is being careful because they are not sure if it is a time to make this new Volkswagen pick-up.

Martina Biene, the chair of Volkswagen Group Africa said that the investment in Volkswagen Group Africa now depends on the government taking action. This is an important time for Volkswagen Group Africa. She said that it is a moment for the Volkswagen Group Africa project. She was talking about Volkswagen Group Africa at the companys plant in Kariega. The future of Volkswagen Group Africa is, at stake now.

The vehicle they are thinking about is similar to the Tukan pick-up that is supposed to be made in Brazil by 2027. Volkswagen thinks the Tukan pick-up is more suitable for South Africa than cars that can carry a lot of people. The people in charge in South Africa say that if they do not have a bakkie, like the Tukan pick-up it will be harder to keep the factory at Kariega running at capacity in the long run. The Tukan pick-up is what they need to make this work.

The automotive sector in South Africa has been having a time for years now. South Africas automotive sector is not doing well because only about a third of the vehicles that people buy in South Africa are actually made in South Africa. This is a change from twenty years ago when more than half of the vehicles sold in South Africa were built locally in South Africa. Nowadays South Africas automotive sector gets a lot of vehicles from countries. The cost of running a business, in South Africas sector has gone up. South Africas automotive sector relies a lot on exporting vehicles to countries, especially Europe and the United Kingdom. In fact Europe and the United Kingdom get than three-quarters of the vehicles that South Africas automotive sector sends out to other countries.

The situation with concentration is getting really uncomfortable. Both car markets are getting close to the deadlines when they will stop selling cars that run on gasoline. We know when this is going to happen.. It is not clear how we are going to get there. The people in charge at Volkswagen say that this means the things that South Africa normally sells to countries are decreasing in value faster than the government can make new rules to deal with it. The transition to cars is a big change for South Africa and, for Volkswagen. Volkswagen is trying to figure out what to do because the old way of making cars is going away.

We all think that this is the thing for South Africa Biene said. We are talking about a decision that will decide if our investment is a success or a failure. This is an important decision for our investment, in South Africa.

Volkswagen makes the Polo Vivo and Polo at Kariega. They also want to make a car a small sports car called the Tengo and they think people will be able to buy it next year. If they make another car like a pick-up truck that will be a big project and they will probably not start making it until 2029 or 2030 but only if the government changes some rules first. Volkswagen will have to wait and see what happens with the rules before they can start making the pick-up truck, which's a big deal, for Volkswagen.

Volkswagen has some things they want to change. They want the government to raise the price threshold for ad valorem tax on cars. Volkswagen also wants to make some adjustments to the export rebates so they can use them in a way. Volkswagen thinks it is an idea to have measures that help sell more cars in the country instead of just exporting them. Volkswagen has talked about these things before in meetings with people in the car industry. Far Volkswagen has not made any official announcements, about these changes.

The government knows people are worried. Frank Stevens, who is a director at the Department of Trade, Industry and Competition said something about the policy in December. He said they are taking a look at the automotive policy. The government has not said when they will make any decisions, about the policy.

Volkswagen has changed the way they think about things. Europe is not the place for them to sell cars to other countries anymore. Now they care more about Africa and other places, outside of Europe. This means South Africa needs to show it can make cars well and compete with places rather than just being a place that has been making cars for Volkswagen for a long time. Volkswagen needs to see that South Africa is a place to make cars not just because they have always made cars there but because they can do a good job.

The investment decision remains open. The policy review remains ongoing. The gap between the two is doing the work.