Parliament Committee Chair Warns VW’s 30-Year Kariega Polo Legacy at Risk
- Volkswagen's potential Kariega plant closure raised national concern over job security and economic impact
- 2026 is deemed a critical year for Volkswagen's future operations in South Africa amid policy uncertainty
- Parliament urged collaborative action to enhance industrial policies and safeguard the automotive sector's sustainability
- Parliament Chair of the Portfolio Committee on Economic Development and Trade, Sonja Boshoff, shared her insights with Briefly News
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Justin Williams, a journalist at Briefly News since 2024, covers South Africa’s current affairs. Before joining Briefly News, he served as a writer and chief editor at Right for Education Africa’s South African chapter.
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EASTERN CAPE, KARIEGA - The potential closure of Volkswagen's Kariega plant has drawn concern from Parliament, with the Chair of the Portfolio Committee on Economic Development and Trade warning of serious national consequences if the operation collapses.
Make or break year for Volkswagen
This follows warnings from Volkswagen Group Africa Chair and MD Martina Biene that 2026 will be "make or break" for Volkswagen in South Africa. Volkswagen South Africa (VWSA) directly employs about 4,000 people at its Kariega plant, which marks 30 years of its Polo car production this year. Parliament Chair of the Portfolio Committee on Economic Development and Trade, and member of Parliament, Sonja Boshoff, told Briefly News that the possible shutdown would have far-reaching consequences beyond the Eastern Cape.
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"I view the potential closure of Volkswagen’s Kariega plant as a matter of serious concern, not only for the Eastern Cape but for the country as a whole," she said.
She described the automotive sector as a strategic pillar of South Africa's industrial base, supporting thousands of direct and indirect jobs across component manufacturers, logistics providers and local economies. Any disruption at a facility of this scale, she warned, would trigger knock-on effects on employment, investor confidence and the broader manufacturing ecosystem.
Boshoff said prolonged policy uncertainty was compounding pressure on the sector. She stressed that stability, predictability and timely decision-making were critical if South Africa was to remain competitive in an increasingly contested global automotive market. Her comments come after Biene revealed she wrote to President Cyril Ramaphosa before Christmas, urging urgent movement on automotive policy.
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Other regions offered stronger prospects
Biene said Volkswagen Germany was assessing whether further investment in South Africa was economically viable. She warned that although VWSA could build a business case, other regions offered stronger prospects. She described 2026 as decisive for the company’s future in the country.
Biene said she had held multiple discussions with the Department of Trade, Industry and Competition (DTIC), including Minister Parks Tau. While the engagements were cordial, she said they produced no concrete outcomes, prompting her letter to the president. Biene warned that without urgent policy changes, South Africa would miss targets set in the Automotive Masterplan 2035 (SAAM). She said the Automotive Production and Development Programme (APDP) and SAAM 2035 provided policy blueprints, but the country had failed to reach the projected vehicle production scale and to achieve the projected growth in the domestic market.
Kariega the second-smallest plant
According to Biene, unions, suppliers and other stakeholders were aligned. What remained, she suggested, was decisive government action. Biene said Kariega is the second-smallest plant in the Volkswagen Group, slightly larger than Osnabrück in Germany, and struggles to compete on price with imports due to high costs and limited production scale. She noted that India’s labour costs were already about 50% lower than South Africa's before recent automotive wage negotiations.
She added that policy tools beyond tariffs could strengthen local manufacturing and reiterated support for the African Continental Free Trade Agreement as a growth lever. Biene cited the Chery takeover of Nissan's Rosslyn plant as a positive development and said she was watching potential market entry by Stellantis and other manufacturers.
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Parliament calls for coordinated action
Boshoff said there was still a window for government, industry and Parliament to act collaboratively. She called for accelerated finalisation and implementation of key industrial policy instruments, alignment between energy, trade and industrial policy, and continued engagement with original equipment manufacturers, labour and suppliers.
She said Parliament had a responsibility to hold the executive accountable for creating an enabling environment and to facilitate dialogue to support long-term industrial sustainability.
Local production costs Fforce Mpact to lay off 400 employees
In another article, Briefly News reported that Mpact faces layoffs as 400 jobs are threatened due to uncompetitive local production costs.
The JSE-listed company, spun off from the Mondi Group over 10 years ago, is set to close in March 2026.
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Source: Briefly News
