By Promit Mukherjee and Joe Bavier
JOHANNESBURG (Reuters) – Volkswagen’s South African unit aims to develop new markets for its petrol and diesel cars in Asia and Latin America, its chief executive said, as Europe restricts sales under the transition to electric vehicles.
Three quarters of the cars produced by the South African automotive industry, which accounts for 5% of gross domestic product and more than 100,000 jobs, are exported, mainly to European countries.
But with Britain planning to ban sales of new internal combustion vehicles from 2030 and the European Union following suit in 2035, the South African government has warned of an existential threat to the sector.
Martina Biene, the new chief executive of Volkswagen South Africa, told Reuters that the company’s manufacturing facilities in the country did not foresee an immediate pivot to producing electric vehicles.
Instead, it would partner with the company’s Indian and Brazilian manufacturing centers to produce gasoline and diesel vehicles for countries in Asia, Latin America and Africa that are likely to lag behind the economies. progress in the transition to electric vehicles.
“That’s clearly our current strategy,” she said in an interview. “I think by 2035 there will be electric vehicle production in Africa… but in the meantime we will probably export less to Europe than other countries.”
Volkswagen South Africa produced more than 129,000 vehicles and more than 58,000 engines last year, mostly for export.
Biene said the German automaker was also looking to develop and tap into more largely untapped markets in Africa.
This would focus on selling South African-made petrol and diesel vehicles in most markets and imported electric vehicles in countries like Mauritius, Cape Verde and South Africa, as demand for cars increases. respectful of the environment is increasing there.
The South African government last year proposed a package of measures to encourage electric vehicle manufacturing and promote electric vehicle infrastructure, but the cabinet has yet to adopt a formal electric vehicle policy.
It is seeking 128 billion rand ($7.42 billion) to fund a transition to electric vehicles as part of a plan it is presenting at the COP27 climate summit currently taking place in Egypt.
($1 = R17.2532)
(Reporting by Promit Mukherjee; Editing by Joe Bavier and Susan Fenton)
