Volkswagen South Africa will invest 750 million rand ($US119.7 million) in a new paint shop at its Eastern Cape factory to boost capacity for domestic and export sales, the company told Reuters on Monday.
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The investment reportedly is part of a two billion rand, three-year programme announced last year by the firm, with the full cost of the paint shop being funded by the South African unit.
“The new paint shop will enable VWSA to capture future domestic and export markets,” managing director Andreas Tostmann told Reuters.
The news agency noted the VW unit was awarded an export deal by its German parent in June last year, which could bring it four billion rand in annual revenues.
Global auto makers are increasingly awarding their South African subsidiaries lucrative contracts to take advantage of the country’s relatively low labour costs and the government’s motor industry development programme, Reuters said.
Early this month General Motors announced it would invest more than $100 million in its South African plant to assemble the Hummer H3 sport utility vehicle, creating 450 new jobs, the news agency noted.
