While market challenges are plenty, Volkswagen Group Africa (VWGA) MD Martina Biene says she has no intention of giving up.
Speaking at the company’s recent 2026 Indaba, Biene noted import substitution, lack of scale in the local market, high cost of doing business, and policy uncertainty as the four biggest impediments to industry.
This is a crucial year for VWGA, as it prepares to add a third model line at the Kariega plant in 2027.
The Tengo crossover will be produced alongside the second-generation Polo Vivo and sixth-generation Polo.
The latter model remains the plant’s biggest export, with VWGA intending to continue serving European markets until 2035.
In 2027 a mild hybrid version of the Polo will also be built, allowing for technology transfer with the Tengo.
It is hoped that policy would allow for incentivisation and increased uptake of new energy vehicles (NEV) by this time.
Biene said the company’s executives at the global level cautioned that an improvement in South Africa’s policies was imperative to investment decisions around the facility’s next project, as stronger business cases to manufacture in other regions, including Morocco, eclipse South Africa’s appeal.
Volkswagen is among legacy manufacturers facing increasing competition from Chinese and Indian imports.
However, Biene, who is also president of the African Association of Automotive Manufacturers (AAAM), opposed higher duties against these rivals.
She instead called for revisions to the Automotive Production Development Programme (APDP) that would favour complete-knocked-down (CKD) manufacturing.
Biene conceded that Volkswagen could not compete with brands such as Suzuki on price.
The Japanese firm imports most of its range from India, a region where labour costs undercut those of South Africa by 50%, according to Biene.
Suzuki widened the sales gap in January, recording 6,410 units, ahead of VWGA in third place at 4,774 vehicles. Toyota, which produces vehicles in KwaZulu-Natal and imports rebadged Suzuki products from India, remains South Africa’s market leader, with 11,786 cars sold last month.
VWGA ended 2025 with its third-highest volume to date, at 156,837 units, of which 119,771 were for export. A volume reduction of 20,000 units is forecast in 2026, with 30 scheduled short-time days towards the end of the year.
The MD was pleased that South Africa’s new vehicle market had returned to pre-pandemic levels of activity.
According to Naamsa, South Africa’s automotive business council, a total of 596,818 new vehicles were sold in 2025, an increase of 15.7%.
For 2026, the brand has new model introductions planned, including the Polo Vivo Xpress panel van, the new generation T-Roc and the T7 Caravelle hybrid, which, unlike the Ford-based T7 Kombi, is an independent production designed by Volkswagen.
VWGA’s premium portfolio Audi is aiming for a local resurgence in 2026.
“Our focus is on sustained product momentum, a refined portfolio and a compelling ownership proposition, while remaining true to the performance DNA that defines the four rings,” said brand head Markus Schuster.
This year it will launch the latest iterations of the Q3, Q5 and RS 5. The Q3 is presently the best-selling nameplate for the marque locally.
Globally, Audi is preparing to make its Formula One entry, under the Audi Revolut F1 Team banner.
VWGA’s motorcycle brand Ducati also took the opportunity to trumpet its releases for 2026. Fans of the two-wheel performance brand can look forward to the Desmo450 MX Factory, Panigale V4 R, Panigale V4 Lamborghini, Monster, DesertX, Hypermotard V2, Diavel R S and Multistrada.
TimesLIVE
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