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2006-01-27 09:37
"The Company embarked on an aggressive investment and growth plan which gained momentum in the year 2000.

"In the period 2000 through 2008, Volkswagen South Africa will have invested over R6-billion in new models, a new paint shop and a new truck and bus assembly plant.

"This aggressive investment strategy is now bearing fruit in terms of job creation, growth in the domestic passenger market, growth in export volumes and building the brand's presence in the light, medium and heavy commercial vehicle markets," said Andreas Tostmann, Managing Director, Volkswagen of South Africa.

In 2003, the total passenger market in South Africa was 260 245 vehicles. In 2005, this figure grew to 422 515 cars. In the same period, the Volkswagen brand in South Africa grew its volume from 49 497 cars to 78 996 cars in 2005 - growth of 60% - in line with the exponential growth in the total passenger market.

The Audi Brand, competing in the luxury segment, increased its volume in the period by a whopping 53%. Audi sold 12 002 cars into the highly competitive luxury segment in 2005. It is now a true contender in this highly demanding, high price vehicle segment.

Volkswagen of South Africa's market share in the passenger market has remained consistent around the 21.5% level for the past three years. This, despite a major influx of new marques and models into an already crowded passenger market.

Passenger market share of 21.5% in 2005 gave Volkswagen of South Africa market leadership. 2005 Volkswagen passenger volumes were 28% up on 2004, 1% ahead of the total passenger market growth over the period.

"We announced our intentions to compete in the medium and heavy commercial market in the not too distant future. In the meantime, we have grown our presence in the light commercial market by over 224% compared to the 2003 volumes.

"This segment of the market in South Africa grew by 60% over the same period. This performance clearly illustrates our intentions of becoming a major commercial vehicle competitor in this all important vehicle segment in our domestic market," said Tostmann.

"Production at the Uitenhage Plant has grown from 78 000 vehicles in 2003 to over 112 000 in 2005 - growth of 43%. It has enabled the Company to increase its total number of employees by 19% over the period.

Over 1000 new jobs have been created in Uitenhage, excluding a similar number of new jobs created within the Volkswagen supplier network. This is critical to the region which suffers from extremely high unemployment levels," continued Tostmann.

Of the 112 000 vehicles produced in the Uitenhage plant in 2005, 40 000 were exported to the Asia Pacific Region. Vehicle exports have grown by close to 30% over the past two years making Volkswagen of South Africa the number one vehicle exporter in 2005.

This is a critical factor in the overall Volkswagen South Africa success story. Through this aggressive export programme, it has enabled the company to import the entire Audi range and the low volume, higher priced models within the Volkswagen range.

"The core philosophy behind the Volkswagen brand is to build people's cars to meet people's needs. In South Africa, a key factor in vehicle ownership is affordability.

"The entry level or low price segments of the market in South Africa constitute 48% of car purchases. Within this critical segment, the Volkswagen Brand achieved 30% share in 2005.

"The key players in this equation for Volkswagen Brand are the ever green Citi Golf range, the Polo and Polo Classic models," said Tostmann.

"Volkswagen of South Africa is confident of future growth in the vehicle market in South Africa. It is not inconceivable that total annual vehicle sales could exceed one million vehicles by end 2010. All it requires is 10% annual compound growth on the 2005 total sales figure of 618 201 vehicles," concluded Tostmann.

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