With an early production capacity of 5,000 units per year, a top official of the state-owned Kiira Motors Corporation (KMC) told Reuters that Uganda is all set to start new vehicle production by June 2022.
KMC will start with production of buses of various sizes to meet the demand for passenger transportation.
Ultimately, the firm hopes to expand to manufacturing trucks.
The East African country joins other regional countries including Rwanda and Kenya that are at various stages of developing domestic auto industries to meet growing demand for new vehicles.
Kiira Motors Corporation (KMC), Chief Executive Officer Paul Isaac Musasizi said in an interview that the firm started construction early this year of the first phase of its production plant in Jinja, eastern Uganda.
Previous year German carmaker Volkswagen launched Rwanda's first locally assembled car at its new factory in Kigali, with Europe's biggest carmaker hoping to tap into an expected expansion in demand for ride-sharing in the region.
Paul Isaac Musasizi, further said, "the plan is to have the begining phase completed and commissioned by end of June 2022, we should be in the market with our product by then."
The Ugandan government has provided $40 million to fund the firm's operations up to June 2022 beyond which KMC plans to sell stakes to private equity investors to raise extra funds to finance further growth.
Car manufacturing efforts in the region have long been shuffled by imports of cheaper second hand cars mainly from Asia.
Musasizi said a range of factors including healthy economic growth rates, a large and growing population and technological innovations that could bring down production costs will help support a sizeable domestic market for new cars.
KMC is merging with China's state-owned China Hi-Tech Group Corporation (CHTC) which specialises in manufacturing of a range of products including textile machinery, commercial vehicles and others.
Also, Musasizi noted that CHTC is providing them with technical capacity and helping to train a group of Ugandan engineers in China.