Audi ponders local manufacture in SA

JOHANNESBURG - German premium vehicle brand Audi plans to investigate options to resume local production of one of its models at Volkswagen South Africa’s plant in Uitenhage.

Trevor Hill, the Head of Audi South Africa, said local production of an Audi model was not off the table, but they did not have any plan at the moment for local production.

“It’s something I would love to do, but it’s a global decision. "We have a very strong network of factories around the world and we can supply what we need at the moment.

“If global demand picks up, then maybe we can talk about it but such a project is probably five or six years down the track,” he said. Hill said there were vast benefits from producing in South Africa in terms of the export credits domestic vehicle manufacturers earned and a strong local presence.

Volkswagen is taking expansion into Africa very seriously. Photo: Bloomberg

He said the Audi A4 was built in South Africa until April 2000 but then a decision was taken to stop production in South Africa. Hill said production capacity was not a problem at Volkswagen SA’s plant and the problem was getting sufficient volume to support a business case for local production, particularly as that volume would not come out of the South African market, but from exports.

He confirmed Audi about three years ago worked on a local production plan, but was unable to get a positive business case for it. “But I’m definitely going to rehash it and investigate certain scenarios, but it’s tough,” he said.

Hill, who took up the position of head of Audi SA four months ago, said times were tough for premium brands in South Africa, which year-to-date was 13percent lower than the corresponding period last year.

VW's Polo Vivo plant in Port Elizabeth. Picture: Supplied

But Hill said Audi, which had an about 20percent market share of the premium segment in South Africa, would not be slowing down its plan to bring new products to the domestic market. He said the new Audi A8, A7, facelift TT and Q8 sport utility vehicle would all be launched into the South African market next year.

“Despite the tough market, the latest product is still coming into the South African market and we will stick to our DNA of ‘Vorsprung durch Technik’, which is advancement through technology.

“We will then have the youngest portfolio in the premium segment,” he said. Hill expected Audi sales in South Africa to be between 2percent and 3percent lower this year than last year and the brand to achieve sales growth of 5percent next year.

- BUSINESS REPORT

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