VW launches first mobility assembly plant in Rwanda
Group begins journey to lead emerging automotive industry in Africa
VOLKSWAGEN South Africa has launched the first integrated-mobility solution in Africa, and possibly the world, in Rwanda as part its strategy to lead the emerging automotive industry in Africa.
Thomas Schäfer, managing director and chairperson of Volkswagen Group South Africa and head of the sub-Saharan Africa region, said at the official opening yesterday facility comprised semi-knocked down local assembly, a new vehicle business and innovative mobility services in Rwanda.
Schäfer said Rwanda could become a blueprint for other African and emerging market countries.
He said that under Volkswagen’s Transform 2025+ strategy, they were strengthening their regions and focusing on new up-and-coming markets.
“Alongside North and South America as well as China, the sub-Sahara region plays an increasingly important role,” Schäfer said. “Today cements another pillar into the ground of Volkswagen’s sub-Saharan Africa strategy. Our goal is to play a leading role in the emerging automotive industry in Africa as we pursue a rapid and flexible expansion strategy over the coming years.”
VW SA also has operations in Kenya and Nigeria. Schäfer said $20 million (R275m) had been invested in the first phase of the assembly at the Rwanda facility, which had a capacity to produce up to 50 000 units a year although they saw volumes of about 1 000 units in the first year.
“This is not a bad number considering currently only 3 000 new cars a year are sold in Rwanda,” he said.
The facility will assembly Polos, Passats, Tiguans and Teramont models as well as possibly Amaroks.
Schäfer said this had created about 1 000 new jobs, and added demand increased, VW SA would move to phase two, which involved increasing the capacity up to 10 000 cars a year.
Schäfer said VW ultimately planned to move to completely knocked down vehicle production in Rwanda.
“Perhaps some of our guests might have expected a much bigger operation (in Rwanda) but this is how an auto industry begins and how we started in countries like China and Russia which now have a thriving auto industry,” he said.
Schäfer stressed that VW did not get special incentive package from the Rwandan government but would qualify for a seven-year tax holiday and duty exemption on parts in terms of the country’s investment promotion scheme.
Rwandan President Paul Kagame said Africa did not need to be the dumping ground for second-hand cars or “second-hand anything”.
“In the long run you end up paying a higher price,” he said.
Schäfer said the majority of the vehicles assembled would initially be for Rwandan mobility fleet and eventually become locally assembled used cars, which meant the ecosystem would feed on itself.
At the same time, customers would be able to buy the locally assembled models from CFAO, Africa’s largest automobil network. Zarak Kahn, executive director of CFAO, said they had formed a strategic partnership with VW, focusing on bringing affordability mobility to Africa and would assemble, distribute and back up VW’s products in Rwanda.
Kahn said the launch of VW’s integrated mobility solution coincided with the opening of their new Volkswagen dealership in Rwanda, which was an expansion of their partnership with the group.
Michaella Rugwizangoga, chief executive of Volkswagen Mobility Solutions Rwanda, said the four legs to the projects would be introduced on a phased basis starting with corporate car sharing, which would begin with 40 vehicles and look to ramp up to 140.
This would be followed by ride-hailing with an initial fleet of 150 vehicles, public car sharing next year with an initial 250 cars and then a shuttle service and a peer car-sharing service.