Days Numbered for VW Polo Vivo in South Africa

Volkswagen Group is reconsidering the future of its Polo Vivo hatchback in South Africa amid plans for new model introductions and mounting competition from lower-priced imports. During a recent National Automobile Dealers’ Association (Nada) event, Martina Biene, Chair and Managing Director of Volkswagen Group Africa, highlighted several challenges facing local manufacturers.

Challenges Facing Local Manufacturing

Biene noted that local carmakers in South Africa face an uphill battle against undervaluation and limited protection against cheaper imports. She pointed out that the local industry bears the brunt of government shortcomings, including:

• Unreliable electricity supply
• Inefficient transport and logistics
• Operational issues at ports

These factors contribute to additional production costs that foreign manufacturers—particularly those from Asia—do not experience, creating an uneven playing field. “That is not correct, and we don’t price because of our margin,” Biene remarked, emphasizing that low production volumes further disadvantage local manufacturers. For instance, Volkswagen produces only 27,000 Vivos annually, in stark contrast to other segments where 300,000 to 400,000 vehicles are produced, allowing those competitors to benefit from economies of scale.

Strategic Shifts and Future Models

In response to these market challenges, Volkswagen is set to introduce more budget-friendly models to regain market share. The company recently announced a R4 billion investment in its Kariega plant in the Eastern Cape, earmarked for the manufacture of a budget SUV. Known as the Tera in other markets—and likely to be renamed for South Africa—this new SUV is expected to be based on the popular Polo platform, positioned below the imported T-Cross in both size and price.

To accommodate these changes, the Kariega plant will undergo a major refurbishment starting mid-April, with operations halted for approximately one month. Alongside the new SUV, Biene mentioned that Volkswagen Group Africa is developing a business case for an additional new model, a move that could eventually lead to the discontinuation of the Polo Vivo. “I don’t know if we can run the Vivo for as long as we ran the Citi Golf,” she stated, hinting at a potential end to its production.

A History Under Question

The future of the Polo Vivo has been a topic of discussion for some time. Last year, company representatives at VW’s Polo factory in Kariega suggested that the Vivo would remain on the market as long as demand persists, with some comments projecting its presence until at least 2030. However, given the current production volume and rising competition, this outlook is increasingly uncertain.

Introduced in 2010 as a successor to the Citi Golf, the Polo Vivo quickly established itself as an affordable, reliable, and practical choice for many South African buyers. In 2024, Volkswagen released a refreshed version with prices starting at R266,600 and rising to R356,000 for the top model. By 2025, the pricing of the Polo Vivo ranges from R271,900 to R363,100, placing it at a competitive disadvantage as 20 cars from various brands are now available at lower prices. Notably, 16 of these models are imported from Asia, underscoring the aggressive pricing strategies of foreign manufacturers.

As Volkswagen Group Africa navigates these challenges, the future of the Polo Vivo remains uncertain, balancing on the edge of a significant market transformation.