If home is where the heart is, then Volkswagen won’t be singing that tune for much longer if German officials in the City of Hamburg have their way. Just like Cape Town, which has grand plans to be a very “green” urban metropolis, Hamburg, which is a mere 2 hour drive way from VW’s home, Wolfsburg, is planning on building infrastructure that will make it near impossible for people to drive cars. Okay, maybe it won’t be impossible, but the idea is to discourage the driving of motor vehicles, opting for bicycles and walking instead. This is quite amazing, however, the practicalities of it are very dubious as things stand.
Yes, citizens can choose to walk or bike to work, but they’ll still need cars as vanity possessions that need to be shown off. In this case, that showing off has to happen on the streets. The year 2013 was a very good one for VW and the other big automakers. Record VW sales at home and abroad meant Volkswagen shipped well over 9.7 million individual cars. That’s the biggest problem, people will continue buying cars, and for a very long time. This isn’t just true for emerging markets like South Africa or China, but in developed markets like Germany itself, and the US, etc. VW is committing over $20 billion in the next 4 to 5 years on capital expenditure. While former US vice presidential candidate once famously yelled, “Drill, drill, drill!”, encouraging the big oil companies, similarly, the heads of the big car companies are shouting, “Assemble, assemble, assemble!”
Volkswagen aims to be the world’s biggest manufacturer of automobiles by the year 2020, overtaking both General Motors and Toyota for the crown. VW’s presence in South Africa already makes it second only to Toyota. The domestic market is tough, with labour unions pretty much calling the shots on many factors that may or may not affect growth. Brands like UsedCarsForSale are leveraging on Volkswagen’s growth, with Volkswagen making up the bulk of their second hand vehicles.
Staying at home, dealers from the Cape, up to the northern provinces more than welcome the expansion-led strategy of VW. This kind of thinking is ultimately positive for income mobility of all South Africans. A good example is the R6-billion the car maker had invested in their Uitenhage plant over the past five years through 2013. That’s a great achievement that is being replicated all across the world.
And back to Hamburg, it’s most unlikely that a force as powerful as the motor industry in Germany could be bullied out of their home turf, but whatever the outcome, they can find a home in South Africa, where cars can be built in a sustainable manner, and consumers understand the choice they make by opting for a motor/bicycle/walking balance. Germany itself, will welcome more VWs for sale in SA.
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