The warning came from Sonja Boshoff, Chairperson of Parliament’s Select Committee on Economic Development and Trade, after reports that Volkswagen is reviewing as many as 100,000 jobs worldwide. While no decision has been announced about Volkswagen South Africa, Boshoff said the developments should be treated as a wake-up call for the country.
Her concern is that South Africa is competing in a far tougher global environment, where vehicle manufacturers are reassessing where to invest, what to produce and how quickly they can respond to cost pressures and changing demand. Volkswagen is under strain from higher production costs, weaker margins on electric vehicles, fierce competition from Chinese manufacturers and global trade tensions.
The pressure is particularly visible in Germany, where political and labour leaders are debating ways to protect employment and factory utilisation. Olaf Lies, the premier of Lower Saxony, has suggested that Volkswagen consider producing in Germany models currently developed in China, arguing that this could support jobs and innovation at home. Lower Saxony is a major Volkswagen shareholder and hosts several of the company’s German plants.
Reports have also suggested that Volkswagen may close factories and reduce investment as it tries to address weak sales and growing competition. Chinese carmakers such as BYD, Geely, Chery and SAIC have become stronger in both China and Europe, intensifying pressure on established global manufacturers.
For South Africa, Boshoff said the lesson is clear: investment must be earned. The automotive sector supports hundreds of thousands of direct and indirect jobs across manufacturing, components, logistics, dealerships and small businesses. Any loss of confidence in the sector would therefore be felt well beyond assembly plants.
She called for faster reforms to improve policy certainty, reliable electricity supply, efficient ports and rail systems, lower regulatory burdens and quicker implementation of measures that make South Africa more attractive to automotive investors.
Boshoff also said Special Economic Zones should become genuine engines of competitiveness by cutting unnecessary red tape, speeding up approvals and encouraging investment, innovation and job creation.
Her message was that government, organised labour and industry need to work together before jobs come under threat. As global manufacturers reconsider production footprints, South Africa must show that it can offer a stable, efficient and competitive base for future vehicle programmes.
“Every automotive investment secured in South Africa protects livelihoods, strengthens local supply chains and contributes to economic growth,” Boshoff said. “The time to strengthen our competitiveness is now.”
Staff Writer
Reporting from the front lines of the automotive industry, delivering expert analysis and the technical updates that drive the South African motor sector forward.
