Volkswagen South Africa to double exports in '10

JOHANNESBURG - Europe's biggest carmaker, Volkswagen, will almost double exports from its South African plant in 2010 under a 27 billion rand ($3.59 billion) global contract for right-hand drive models of its new Polo.

The manufacturer of the Golf and Polo hatchbacks said the plant in Eastern Cape province would increase exports to 55,000 next year from a projected 28,500 in 2009.

Based on the assumption that we'd export 55,000 cars next year, the total contract is worth about 27 billion rand, Bill Stevens, a spokesman at Volkswagen South Africa, said.

VW South Africa would also invest about 4 billion rand this year and next in a new plant.

It will export the new Polo hatch to all right-hand drive countries, including the United Kingdom, Ireland, Australia, Malaysia and Singapore, and introduce the model on to the South African market early in 2010.

South Africa's auto industry, one of the biggest in the country's manufacturing sector, is reeling from the global economic downturn and its impact on consumer spending.

New vehicle sales in the country fell by 12.5 percent year-on-year in October. Exports were 25.4 percent lower compared with October last year at 20,948 vehicles but surged 49.9 percent from September.

($1=7.530 Rand)

(Reporting by Phakamisa Ndzamela; editing by John Stonestreet)