Volkswagen Group opens first car assembly plant in Rwanda

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The Volkswagen brand is expanding its engagement in Africa: today saw the start of its Integrated Mobility Solutions in Rwanda that includes local vehicle assembly, innovative mobility services and a sales and service retail outlet CFAO Volkswagen Rwanda.

Thomas Schäfer, Volkswagen Group South Africa Chief Executive Officer and responsible for the Sub-Sahara region, officially launched the project in the capital Kigali in the presence of Paul Kagame, President of the Republic of Rwanda. 

“Rwanda has great potential. The country is young, modern and hungry for individual mobility. With a package specifically tailored to the region comprising local vehicle production, new vehicle business and innovative mobility services, we intend to harness the opportunities for growth and create new opportunities. Rwanda can become a blueprint for other African and emerging market countries,” said Schäfer. 

At the centre of the project are app-based car sharing and ride hailing offerings that take individual mobility to a broader share of the population. The project kicks off with community car sharing primarily aimed at companies in the capital, Kigali. A ride hailing service will follow later this year. Further mobility services are planned for 2019. Rwanda is the ideal market for new mobility solutions because the people there are very digitally-minded and tech-savvy. Moreover, demand for mobility is growing and the present offerings can scarcely keep pace with these needs.

On the production side, local assembly of the latest-generation Polo and Passat will now commence with other models planned for the future. Initially it is planned to build up to 1,000 vehicles per year depending on demand and the success of the mobility fleet, with an annual production capacity of up to 5,000 units. Assembly is flexibly designed and can be expanded further if required. The sales and service retail outlet CFAO Volkswagen Rwanda is part of the same complex and guarantees comprehensive customer service. Volkswagen will spend some US $20 million in Rwanda for phase one.

Sub-Sahara strategy

Volkswagen is also driving its Sub-Sahara strategy further forward with the start of production operations and market activities in Rwanda.

“Volkswagen is one of the pioneers in Africa. Over 60 years ago, Volkswagen established its first plant outside of Germany in South Africa and now we are the first in the Sub-Sahara region. Obviously there are some challenges, but there are great opportunities as well. By starting out with several, smaller operations we can learn and respond flexibly to developments. At Volkswagen, we believe in Africa,” commented Thomas Schäfer. 

“Africa does not need to be a dumping ground for second hand cars, or second hand anything. In the long run, you end up paying a higher price anyway. If you can pay a high price for second hand, why not pay a high price for something new? It is a simple choice. Africans, Rwandans, we deserve better. This is one way of showing how we can afford it. For these and other reasons, this promising partnership with Volkswagen is off to a good start,” said Paul Kagame, President of the Republic of Rwanda.

Africa’s economic development

Volkswagen is not only seeking commercial success in Rwanda, but also intends to make a sustainable contribution to economic development in the region.

“Rwanda and Africa are much more than just another market for us. We see ourselves as part of African society and want to be a good, reliable partner for people here – as at all of the Volkswagen Groups 122 locations worldwide,” explained Thomas Schäfer. 

“Volkswagen’s new project in Rwanda is the kind of activity we would like to see copied by other German companies. We want many more of them to launch new business ventures in Africa. Volkswagen has brought good ideas and a generous dose of pioneering spirit to this project and together with its German and Rwandan partners is developing a viable mobility concept for the future for Rwanda,” said Dr Gerd Müller, German Federal Minister. 

“We are pleased to support this project through Germany’s development cooperation. These companies are making a direct contribution towards sustainable economic development – and that is totally in keeping with the idea of our Marshall Plan with Africa. The only way for people in Rwanda and in other places to have an attractive future in their own countries is if they can be offered high-quality training and good jobs where they are,” added Müller. 

Start der Volkswagen Mobility Solutions Rwanda am 27.06.2017 in Kigali, Ruanda. Foto: Friso Gentsch/Volkswagen

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Bontle Moeng is the Founder and Managing Director of BizNis Africa. Moeng has spent 15 years working in the digital and online media industry across Africa. She applied her trade at True Love magazine prior to discovering her passion for Investment news in key sectors across Africa. Moeng previously worked for ITWeb, Starfish Mobile Technologies, ITNewsAfrica, AVATAR Agency, eNitiate, Global Interface Consulting and Havas Johannesburg. Her primary focus is to provide solid and valuable content on investment opportunities for the ICT, Energy and Mining sectors across Africa. In addition, the online news publication assists global companies to expand their presence in Africa. Email: news@biznisafrica.co.za

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