Volkswagen of South Africa has secured a major export contract worth more than R12-billion to supply engines to the Volkswagen Group over the next six years.

Volkswagen of South Africa has secured a major export contract worth more than R12-billion to supply engines to the Volkswagen Group over the next six years.

The TDI engines will be shipped to Volkswagen’s Hannover plant in Germany for use in the production of LT panel vans. VWSA MD Andreas Tostmann said about 27 500 of the five-cylinder engines would be shipped this year.

“The engines will be shipped on a weekly basis, escalating to a forecasted 35 000 units next year. By 2010 an anticipated export volume of 440 000 units will be achieved,” Tostmann said.

The TDI engines are manufactured in four derivatives, ranging from 61 kW to 80 kW, for normal production and industrial use.

Tostmann said VWSA had invested R240-million in its facilities to successfully manage the contract.

"The contract will be extended to include the next generation of five-cylinder engines and, possibly, a petrol engine destined for export to China," he said.

The new contract is in addition to VWSA's announcement last year that the company had secured a R350-million catalytic converter export contract to Hannover.

Trade and industry minister Alec Erwin was present at the announcement and said the contract showed that South Africa was capable of supplying sophisticated components to the international market.

Erwin said VWSA’s new contract would certainly move engines and engine compartments up into second place, behind catalytic converters, on the list of the country’s motor components exports.

With this contract, VWSA would be able to provide an additional 250 jobs at its Uitenhage plant. Indirectly more than 130 jobs have been created at the seven suppliers involved, all of which – bar one – are based in the Eastern Cape.

Original article from Car