Wolfsburg – It’s anything but business as usual for car manufacturers, particularly in Europe where internal combustion vehicles are set to be banned during the 2030s.
On top of that, the ultra-strict EU7 emissions regulations due in 2025 could make many ICE cars unviable due to the costs involved in getting the traditionally-powered vehicles to comply.
Small cars are particularly vulnerable because of their thinner profit margins. We’ve already seen the demise of the Ford Fiesta, and now it looks like its long-time rival, the Volkswagen Polo, could follow it to the automotive graveyard.
Following last week’s news that the Volkswagen Golf was looking set to go all-electric for the next generation, Volkswagen’s new CEO, Thomas Schäfer, has told Autocar that the company was currently deciding on whether it would be viable to continue with its small car range beyond 2025.
Apparently there was confusion over how strict the EU7 regulations will be, with mixed messages having come through from the authorities. Schäfer said a decision would be made in the coming weeks once his engineers had determined the exact cost of complying with the new rules. But the prognosis doesn’t look good.
“It makes no sense to go with very small cars beyond EU7. It will push the price up of the small cars by ₤3 000, ₤4 000 or ₤5 000 or more (about R60 000 – R100 000), then all of a sudden a small vehicle becomes unaffordable,” Schäfer told Autocar.
He added that if the stricter rules were enforced then the company would stop investing in small internal combustion engine models and focus on electrifying as quickly as possible. In the long term the company would like to create a small electric car that costs less than €20 000 (R350 000), but at today’s battery costs that could be a challenge.
But if the Polo were to face the axe due to EU7 regulations, where would this leave Volkswagen South Africa, which is currently heavily reliant on Polo exports to Europe?
A few weeks ago, Schäfer, who also headed up VWSA until 2020, said the company was considering building a new “SUV-like” product in South Africa to lessen the company’s reliance on European exports. This new compact vehicle would be based on the current Polo’s MQB-AO platform, and could potentially be exported to other developing markets.
However, regardless of whether a new-generation Polo materialises in Germany, it appears that the nameplate will live an extended life in South Africa as VWSA managing director Martina Biene recently confirmed that the Polo would live on locally beyond 2025 and that the proposed SUV product would not replace it on the Kariega assembly line in the Eastern Cape.
If there isn’t a new Polo, our guess is that the current version would likely live on as a Polo Vivo for quite some time beyond 2025. It could even take some inspiration from the stripped-down Polo Track that was revealed in Brazil recently. Like the current Polo Vivo, it has a normally aspirated MPI engine rather than the more modern TSI unit that powers the latest Polo.
But what about producing an electric model in South Africa? It appears that the company intends to do so, but with the timeline currently set at “2035 at the latest” don’t expect to see an ‘ID’ model rolling off the Kariega line any time soon.