Volkswagen South Africa has opened a R230m ($30.4m) parts distribution centre in Centurian, near Pretoria.
At the opening ceremony VW’s management board chairman Martin Winterkorn said the centre would be fully operational before the end of 2010.
The new 26,000m2 centre is product of the company’s Strategy 2018 project, which has already seen €500m ($620m) invested in the country over the past four years, with the greater part invested over the past 24 months. A €50m press shop is also planned for the company’s Uitenhage plant in the Eastern Cape where production is set to double this year.
With six new suppliers established at the Nelson Mandela Bay Logistics Park near the Uitenage plant the company is also vigorously pursuing a plan designed to increase its local inbound supplier content. Faurecia Interior Systems, Grupo Antolin and Benteler are among the companies supplying VW from there, with logistics providers Uti, MSC and Schnellecke also present and providing JIT deliveries, sequencing, milk runs and other logistics services.
“We have adopted an aggressive local content strategy to ensure that by the end of 2010, we will have increased local content levels from an historic 40% level to in excess of 70% on both the new Polo and the new Polo Vivo platforms,” said Winterkorn.
South Africa had been suffering a chronically underdeveloped local supplier base, which was leading to higher logistics cost but an effort by both manufacturers and government to improve supply chain efficiency is now beginning to show results as production increases.
The increase in localisation at VWSA is coupled with the carmaker’s intensive export strategy, which is expected to see export volumes of the new Polo increase 150% from 30,000 vehicles in 2009 to more than 75,000 vehicles in 2010.
Meanwhile, deliveries in South Africa saw an increase between January and May this year of nearly 35% compared to the same period in 2009 with sales reaching 29,350 vehicles in the first five months.
Winterkorn also outlined VW’s plans to add a €6.5m Dealer Training Academy adjoining the distribution centre with construction planned for the fourth quarter of 2010. He said the purpose of the academy would be to improve VW Group’s customer retail capabilities in the country.
Pictured from left to righ.: Prof. D. Jochem Heizmann, the Board of Management member responsible for Group Production, Rob Davies, South Africa's Minister of Trade and Industry, Kgalema Motlanthe, South Africa's Vice President, Martin Winterkorn, chairman of the Board of Management of Volkswagen Aktiengesellschaft, David Powels, managing director of Volkswagen of South Africa