Volkswagen is set to invest $210 million in its manufacturing facility in Eastern Cape, South Africa, to prepare for the production of a new SUV model slated for release in 2027.

According to Reuters, the investment will enhance various sectors of the plant to support the introduction of a third model to its production lineup from 2027 onward.

Martina Biene, Chairperson and Managing Director of Volkswagen Group Africa, highlighted the strategy behind the investment, noting the unique position of the African auto market.

"While the global shift is towards electric vehicles, markets in Africa, such as South Africa, will continue to focus on internal combustion engine (ICE) vehicles due to ongoing customer demand and the gradual adoption of electric vehicles in these regions,"

Biene explained.

Martina Biene

This development comes as European Union nations aim to cease sales of CO2-emitting cars by 2035, and the United States targets up to 35% of the auto market to be fully electric vehicles.

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The initial phase of the expansion at the Kariega Plant, also known as the Uitenhage Plant, is scheduled to begin towards the end of 2024 during a planned plant shutdown.

The design and development of the new SUV will be led by the Volkswagen Brazil team, with the Volkswagen Group's Africa engineering team adapting the vehicle to meet local and continental specifications, such as right-hand drive configurations.

Details about the new SUV model remain sparse, as Volkswagen has not yet disclosed its name. Currently, the South African plant produces the Polo and Polo Vivo models.

Biene further mentioned that the new SUV model would be marketed in African countries where Volkswagen has a presence. Additionally, Volkswagen plans to introduce its ID.4 test fleet in South Africa and Rwanda alongside the new SUV model.