People of a certain age will remember the day that the Ford factory closed in then Port Elizabeth. At one stroke people lost their jobs, suppliers closed down and PE became the ‘ghost on the coast’ with many people saying; “Will the last person to leave please free the dolphins and switch the lights off!”
In fact, to this day, I still encounter locals who refuse to purchase a Ford because that factory left us in the lurch.
A personal case in point: At the time my late Father had one of the largest electrical contracting firms in the city – Straton Electrical. Now, Straton Electrical did not directly service any of the major motor manufacturers like Ford, but we did do quite a bit of work for suppliers to Ford.
As the Ford retrenchment packages dwindled to nothing and more firms started closing the knock on effect was plain to see. Straton Electrical – NOT directly affected – placed staff on short time, client businesses went bankrupt and many couldn’t pay their obligations.
It was a torrid time and, stupidly I know, I still blame for Ford for creating such major stress in my late Father’s life which probably led to his cancer and ultimate death. He took out bonds on all private paid off property just so that he could keep paying staff – which government minister will do that to ensure that his/her constituents will have food on the table?
And now we are being warned by Volkswagen that their writing is on the wall. AND this time is is not because of apartheid!
THE ONE TAKE AWAY I WANT GOVERNMENT TO SEE:
Your failure to act in a manner that is decisive and clear leads to much pain and death in the lives of citizens – even those NOT directly affected. In fact I could go so far as to say that apartheid killed my father, not Ford!
What the Possibilities are
The situation surrounding Volkswagen Group South Africa (VWSA) is currently a mix of stern warnings and guarded commitment. While the global leadership has expressed serious concerns about the viability of the Kariega plant, they are currently working with the South African government to pivot toward Electric Vehicle (EV) production rather than shuttering the gates.
The most significant “alarm bell” was rung by Thomas Schäfer, the former VW MD and now global CEO of the Volkswagen brand, who highlighted that South Africa is losing its competitive edge due to logistics and energy costs.
Thomas Schäfer (Global CEO, Volkswagen Brand): “Eventually you have to ask, why are we doing this? … I’m very worried about it… We’re not in the business of charity. We are in the business of making money and if the environment is not conducive to that, you have to look at alternatives.” (Late 2023/Early 2024 via Reuters/Financial Times)
However, Martina Biene, the Chairperson and Managing Director of VWSA, has worked to soften the “exit” narrative by focusing on local solutions:
Martina Biene (MD, Volkswagen Group South Africa): “We are not leaving South Africa. We have been here for over 70 years… but we need the government to move faster on the Electric Vehicle White Paper. We cannot be a ‘Polo island’ in a world that is moving to EVs.”
The South African government has responded with the Electric Vehicles White Paper, which aims to provide incentives for manufacturers to transition their assembly lines.
Ebrahim Patel (Former Minister of Trade, Industry and Competition): “We have heard the message from the OEMs [Original Equipment Manufacturers] clearly. Our task is to ensure that the transition to Electric Vehicle production happens in a way that protects the 500,000 jobs supported by this industry.”
Cyril Ramaphosa (President of South Africa): “South Africa is committed to remaining a key player in the global automotive value chain. We are addressing the logistics challenges at Transnet and the energy security at Eskom, which we know are the primary pain points for investors like Volkswagen.”
Suppliers in the Eastern Cape are the most vulnerable. If VWSA were to scale back, the “multiplier effect” would devastate the Nelson Mandela Bay economy.
Mikel Mabasa (CEO of NAAMSA – The Automotive Business Council): “The cost of moving a vehicle from the plant to the port has increased exponentially. If we don’t fix the rail and port infrastructure, we are effectively taxing our own exports and making our plants, like Kariega, uncompetitive against plants in Europe or China.”
A Major Tier-1 Component Supplier (Anonymous): “We are currently operating on ‘wait and see’ mode. We can’t invest in new tooling for the next generation of vehicles until VW secures a long-term EV contract for the Kariega plant. The uncertainty is the biggest killer.”
VWSA has recently completed an investment of R4 billion to upgrade the Kariega plant for a new “SUV-style” internal combustion engine (ICE) vehicle. This is seen as a “bridge” to keep the plant running while the world transitions to electric.
The Bottom Line: VW is not closing yet, but they have made it clear that their stay is conditional on:
- Logistics: Fixing Transnet’s rail and port efficiencies.
- Energy: Consistent power for the Kariega plant.
- Policy: Clear, cash-backed incentives for EV manufacturing.
How You Can Help
While the board in Wolfsburg makes the final financial calls, the South African consumer holds the “voting power” that determines the plant’s local viability. As of 2026, VW leadership has signaled that for Kariega to remain competitive against imports from India and China, the local market must be strong enough to justify continued investment.
Here is how the consumer can directly impact VW’s decision to stay:
Choose “Built, Not Just Bought” Locally
Not every Volkswagen sold in SA is built here. Consumers can help by prioritizing models that come off the Kariega assembly line, as high local sales volumes are a key KPI for the German headquarters.
The “Proudly Kariega” Models: The Polo and Polo Vivo are the bread and butter of the plant.
The 2027 “Tengo” (New Small SUV): VW has announced a new small SUV (codenamed “Tengo” or the A0 SUV) for 2027 production. Consumer interest and pre-orders for this model will be a “make-or-break” signal for the plant’s future.
Avoid “Gray” Imports: Buying through official franchise dealers ensures that the “economic loop” stays within the South African tax and labor ecosystem.
Advocate for “Ad Valorem” Tax Reform
The automotive industry is currently lobbying the government to change how cars are taxed. Consumers can support this by joining the conversation via civic organizations or the NMBCSC.
The Problem: Currently, many entry-level cars (including the Vivo) are hit with an Ad Valorem (Luxury) Tax because the price threshold (starting at R250,000) hasn’t kept up with inflation.
The Solution: If consumers demand that the government raises this threshold, locally built cars would become significantly cheaper, boosting the “scale” VW needs to be profitable.
Support “Local Content” Brands
When choosing between a VW and a cheaper import (like those from China or India), consider the “Job Multiplier”:
1 to 8 Ratio: VW MD Martina Biene recently noted that for every 1 job created by a company that just “assembles” kits (SKD), a full manufacturing plant like Kariega (CKD) creates 8 jobs.
The Supplier Network: Supporting VW supports over 20,000 indirect jobs in the Eastern Cape, from leather seat manufacturers in Gqeberha to glass makers in Springs.
Demand Clean Fuel (10ppm)
The “dodgy fuel” issue is a major reason VW hesitates to bring their newest engines to SA.
Consumer Pressure: By consistently asking for and purchasing 10ppm Diesel, consumers create the market demand that forces smaller fuel retailers to upgrade their tanks and stop “spiking” fuel with paraffin. This clears the technical path for VW to produce Euro-6 compliant cars locally.
Crappy Fuel
The “Polo Island” dilemma is complicated by a technological clash: Volkswagen’s global engines are becoming more sophisticated while South Africa’s fuel infrastructure has struggled to keep pace.
The core of VW’s local engine struggle is the Sulfur content and adulteration of South African fuel. Modern Euro 6 engines (standard in Europe) require ultra-clean fuel to protect sensitive components.
The “Dirty” Diesel Problem: While Europe moved to 10ppm (parts per million) sulfur diesel years ago, South Africa still has a massive supply of 50ppm and even 500ppm in rural areas. High sulfur destroys Diesel Particulate Filters (DPFs) and catalytic converters.
The “Paraffin Spiking” Scandal: In early 2026, the Department of Mineral Resources and Energy (DMRE) confirmed that dozens of service stations were caught “spiking” diesel with illuminating paraffin to boost profits.
The Effect: This lowers the fuel’s lubricity, leading to catastrophic failure of high-pressure fuel pumps and injectors—repairs that can cost upwards of R100,000.
The “Golf 8 GTI” Delay: A prime example was the delayed launch of the Golf 8 GTI in SA. VW had to specially tune the engine to handle local fuel quality, as the original Euro-spec units were prone to “knocking” and long-term damage from local petrol blends.
The EV U-Turn
VW’s narrative of an “EV Only” future has shifted to a “Dual-Technology” strategy. Globally, VW CEO Thomas Schäfer has admitted that the transition is taking longer than expected.
Consumer Resistance: In markets like the US and Europe, EV demand has plateaued due to high entry costs and “range anxiety.” Consequently, VW has extended the life of its Internal Combustion Engine (ICE) platforms.
The Hybrid Bridge: VW is now pouring billions into Plug-in Hybrids (PHEVs) and Mild-Hybrids (MHEVs).
New for 2026: VW is introducing mild-hybrid versions of the 1.0L and 1.5L engines in the Polo and Tiguan lineups to meet emission targets without requiring a full charging infrastructure.
Scout Motors Pivot: Even VW’s new “Scout” rugged brand in the US—originally planned as EV-only—announced in late 2025 that it would offer Extended Range Electric Vehicles (EREVs) that use a small petrol engine as a generator.
The GOOD News
This global U-turn is actually good news for the Eastern Cape in the short term.
Extended ICE Life: Since the world still wants hybrids and fuel-efficient petrol cars, the Kariega plant can continue producing Polos (and the new “A0” SUV) for longer.
Hybridization: Instead of a sudden jump to full EVs (which SA’s grid cannot handle), Kariega is likely to pivot toward hybrid assembly.
Fuel Quality Progress: The government’s Clean Fuels 2 (CF2) policy is set to mandate 10ppm sulfur standards by July 2027, which will finally align SA fuel with the engines VW wants to build.
SUMMARY TABLE: THE VW SHIFT
| Feature | Old Narrative (2021) | Current Reality (2026) |
|---|---|---|
| Strategy | EV Only by 2030/35 | Hybrid, PHEV, and ICE “Mix” |
| Kariega Focus | Export Polos to Europe | New “A0” SUV & Hybridization |
| Fuel Concern | Minor annoyance | Major barrier to Euro 6 tech |
| Primary Risk | Logistics (Transnet) | Fuel Adulteration & Energy |
10ppm Diesel Availability in the Eastern Cape
In the Eastern Cape, 10ppm diesel—marketed under names like Sasol Turbodiesel ULS 10 and TotalEnergies Excellium Diesel D10—is concentrated in major logistics hubs and along the N2 corridor.
1. Gqeberha (Port Elizabeth) & Kariega (Uitenhage)
Kariega Core: Metro Diesel (Algoa Road) and AE Mosel (Mosel Road) are the primary sites serving the industrial belt.
Deal Party / Markman: PE Depot (Markman Road) and Andy’s Truckport (Grahamstown Road) are the reliable “clean fuel” stops for heavy-duty and high-performance engines.
Walmer / Summerstrand: AE 1st Ave Walmer and AE Hobie Beach consistently stock the 10ppm grade due to the density of high-end passenger SUVs.
2. East London & Coastal Route
Woodbrook: East London Depot (Portland Place) is the main 10ppm hub for the city’s manufacturing sector.
Beacon Bay: Shell and Engen sites along the N6/N2 interchange have recently upgraded to 10ppm to accommodate the newer 2024-2025 SUV arrivals.
Kenton-on-Sea: Quest Kenton Garage (Kenton Road) is a key stop for travelers heading toward East London.
3. Inland & Rural Corridors
Cradock: Adami’s Fuel (Voortrekker Street) and Cradock Fuel Station are the designated 10ppm points for inland freight.
Queenstown: Queens Fuels (Cathcart Road) and Die Humansdorp Kooperasie (Dickerson Street) offer 24-hour access to 10ppm.
Ugie / Maclear: East Cape Fuels (Umga Road) serves as the “final safe refuel” point before heading into the higher sulfur zones of the Drakensberg foothills.
The “Fuel Map” is currently in a state of transition due to the Cleaner Fuels Two (CF2) mandate:
The 2027 Ban: The Department of Mineral Resources and Energy has confirmed that diesel above 10ppm will be banned from sale by July 2027.
February 2026 Price Drop: As of February 4, 2026, the price of 0.005% sulfur (50ppm) and 0.001% sulfur (10ppm) diesel has decreased by 57 cents per litre, narrowing the price gap between “standard” and “premium” clean diesel.
The “Paraffin Alert”: Despite the map above, industry experts still advise avoiding smaller, unbranded “No-Name” service stations in the rural Eastern Cape (especially around the former Transkei regions), as these remain high-risk areas for paraffin adulteration which ruins the newer VW injectors.
Pro-Tip for VW Owners
If you are driving a 2024 or newer VW model, look for the “ULS” (Ultra Low Sulfur) sticker on the pump. If the pump only says “Diesel 50,” it is acceptable for occasional use, but regular use in a Euro 6 engine without the 10ppm grade will eventually trigger the “DPF Warning” light on your dashboard.
