Uncertainty looms over thousands of jobs at Volkswagen's Kariega plant

Thousands of jobs at Volkswagen’s Kariega plant in the Eastern Cape are hanging in the balance due to significant delays in government policy decisions, raising concerns about the future of one of South Africa’s paramount automotive exporters.

The plant, recognised as the world's largest exporter of the Volkswagen Polo, is a lifeline for over 3,500 direct employees, while thousands more rely on affiliated suppliers, logistics, and related industries for their livelihoods.

The dire situation has prompted Parliament's Select Committee on Economic Development and Trade chairperson, Sonja Boshoff, to call for urgent intervention from President Cyril Ramaphosa and Trade and Industry Minister Parks Tau.

“Further delays could trigger devastating job losses,” she warned, highlighting the urgent need for decisive action.

Last December, Martina Biene, chairperson of Volkswagen Group Africa, reached out to President Ramaphosa, marking 2026 as a critical juncture for the company’s next major investment decision.

In her correspondence, she expressed deep concerns about the prevailing policy uncertainty that risks pushing the Kariega plant toward a crossroads, particularly with the future of its upcoming export programme remaining unclear.

Although production is slated to begin on the new Polo-based Tengo SUV from 2027, the Brazilian-designed model caters mainly to emerging markets and does not promise the same export volumes as the existing Polo.

Industry analysts caution that in the absence of clear policies and competitive support measures, production volumes, and consequently jobs, could face severe jeopardy.

In her comments, Boshoff emphasised that South Africa cannot afford further industrial decline, especially with unemployment levels remaining stubbornly high.

“The President must act. South Africa cannot afford daily industrial decline, job losses, and factory closures,” she said, responding to reports of the possibility of closure at the Volkswagen Kariega plant if critical industrial policies are not urgently implemented.

She urged the government to swiftly finalise outstanding industrial policy decisions, including clear backing for the Automotive Industry Master Plan, as these steps are crucial for securing future investments and averting unnecessary job losses.

“The South African Government must demonstrate leadership now, not in months or years, before further closures and job losses become unavoidable,” Boshoff added.

IOL