Volkswagen's South African operation said on Wednesday it would invest about 2.1 billion rand ($US235.2 million) in its local plant over the next six years as it gears up to broaden its export range, Reuters reported.

According to Reuters, Volkswagen South Africa (VWSA) managing director Hans-Christian Maergner said the self-funded investment in the Uitenhage plant in the Eastern Cape would enable the company to add the new Polo range to its multi-billion rand export orders.

VWSA was in 1998 awarded a contract by its German parent to build 68,000 Golfs for the United Kingdom market over 18 months, Reuters said, adding that the contract has since been extended to cover other parts of Europe.

"It's a vote of confidence in this country and will enable the company to offer further exciting products in the years ahead," Maergner said in a statement, according to Reuters. "We expect that we will continue, or even slightly increase, our number of fully built up exports in the coming months."

Reuters said the announcement came soon after a government decision earlier this week to extend the Motor Industry Development Programme (MIDP), aimed at boosting vehicle exports, from 2007 to 2012.

Analysts reckon VWSA contributes around 1% to its parent company's total turnover, the news agency added.

"In September (2002) we attained an overall milestone of 125,000 Golf G4s exported to Europe and the United Kingdom," Maergner said, according to Reuters. "Despite the current slump in global demand, we will be expanding the countries that we export to and will start delivering new Polos in addition to the Golfs we currently export.

"We are working agressively in increasing our component exports to the Volkswagen Group from the 1.6 billion rand worth that were exported this year," Maergner added.

Reuters noted that DaimlerChrysler, BMW and Toyota have also awarded multibillion rand export contracts to their South African subsidiaries.

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