South Africa’s auto industry at a crossroads: VW’s unanswered letter to President Ramaphosa

Volkswagen Group Africa has sounded a warning to government saying that this year is make or break for them when it comes to foreign investment. When Volkswagen Group Africa (VWGA) chairperson and managing director Martina Biene wrote directly to President Cyril Ramaphosa just before Christmas, it was an attempt to inject urgency into a process that she says has been dragging on for too long, with very real consequences for South Africa’s automotive future. “I wrote a letter to the President prior to Christmas,” Biene said at the annual VW Media Indaba at the company’s plant in Kariega.

“I mainly outlined that for us as VWGA, this year is crucial for getting an investment decision from VW head office for the next project that’s on the way.” Essentially, she asked for clarity. Not only for the economics of future projects, but also on whether South Africa’s policy environment is moving in the right direction to justify long-term capital investment. “For getting this investment decision, they look at the economics and the business case,” she said, “but also, headquarters look at what happens in this country.

And another non-negotiable they stressed is that we need to see some improvement in South African policies. “You might have a business case,” Biene warned, “but there are better business cases elsewhere because we don’t know whether that is a sustainable way to spend money.” Volkswagen Group Africa chairperson and managing director Martina Biene says her letter to President Cyril Ramaphosa remains unanswered.