Thomas Schäfer, CEO of the Volkswagen Passenger Cars Brand, says there would be “no point carrying on” with small combustion-engined vehicles such as the Polo – a hatchback built in South Africa – in Europe if the impact of the impending Euro 7 emissions regulations is as considerable as expected.
The former head of the Volkswagen Group South Africa, who was appointed global CEO at the start of July 2022 and recently confirmed the Golf and GTI badges would live on, suggested to Autocar it would be too costly to re-engineer small vehicles to meet the upcoming regulations, though added a final decision would be made within a couple of weeks. The news comes on the back of Ford’s recent decision to kill off the Fiesta nameplate by mid-2023.
“We had a very good plan, where we thought EU7 was an insurmountable hurdle that will accelerate electrification. We planned small electric cars that would come in 2025 between Volkswagen, Škoda and Cupra that would be built in Spain,” Schäfer told the British publication, referring to VW’s Pamplona plant, which currently produces the T-Cross and Taigo as well as the Polo.
The Volkswagen Polo hatchback appears to be on borrowed time in Europe.
“And that basically replaces the combustion engine in small vehicles like the Polo, as cars become so expensive, there is no point carrying on,” he said, explaining to Autocar how it would make “no sense to go with very small cars beyond EU7” as the regulations would “push the price up of the small cars by £3000, £4000 or £5000 or more, then all of a sudden a small vehicle becomes unaffordable”.
“Then two [or] three weeks ago, word got out that EU7 was coming through and it would be on a reasonable level. And we thought, ‘okay, let’s go’, that might help us transition a little bit [by keeping models such as the Polo on sale]; it doesn’t change the plans, but it helps financially because you can transition a little easier and reinvest at the same time everywhere. But last week, another message came through and we’re back to square one. It’s even worse.
“We need another two weeks. At the moment, we have engineers evaluating what that means. But if that is true [the expected impact of EU7 on the price of cars], we definitely won’t invest anymore and we’ll just keep the plan to electrify as quickly as possible,” Schäfer said.
Kariega is the only plant in the world building the Polo GTI.
It’s worth noting South Africa builds the Polo hatch for all right-hand-drive markets – while also supplementing production for left-hand-drive markets – and is the sole producer of the Polo GTI. Considering Europe is the main export market for VW’s Kariega facility, a decision to scrap the supermini on the Old Continent would obviously have major implications for South Africa.
Indeed, as we pointed out in our feature documenting the Polo’s tumble down the list of SA’s best-selling vehicles, such a situation would force a significant change to VWSA’s business model. And that appears to be what’s happening already, with the company’s medium-term solution involving an attempt to reduce its reliance on exports to Europe by adding a third MQB-A0-based model to its production line.
This as-yet-unidentified “SUV-ish” vehicle would likely be exported to emerging markets (in the rest of Africa and perhaps even Latin America) rather than Europe, allowing the Kariega plant to fill at least some of the production capacity that would be lost should the Polo be axed in Europe.
So, will the Polo still be available in South Africa? Well, it seems so, with Martina Biene, the freshly appointed chairperson and managing director of VW Group SA, recently confirming both the Polo and Polo Vivo would continue to be built at Kariega “beyond 2025”.
How VW’s Polo slipped down the list of SA’s best sellers
Another round? VW CEO confirms Golf 9 is coming…
Volkswagen set to build mystery ‘SUV-ish’ model in SA
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