AUTOMART AFRICA - AUTOMOTIVE INDUSTRY DIRECTORY | KENYA | TANZANIA | ETHIOPIA

 Nairobi: Taking advantage of the surging car demand in Africa, Volkswagen opened a new assembly plant in Kenya on Wednesday and also launched plans for a ride-sharing service in Rwanda.

This move from the German car manufacturer comes just weeks after it inked a deal to build an assembly plant in Algeria.

"Overall car sales in Africa are bound to rise by 40% within the next five years, that is why we are expanding our business," said Volkswagen Brand CEO Herbert Diess.

 "It is fair to say that the whole continent has seen a long period of economic stagnation, but just like China in the early 1980s, Africa offers great business opportunities. That holds especially true for Kenya."

The inauguration of the plant in Kenya marks Volkswagen’s  return to the regional hub after an absence of close to four decades.

The assembly plant, located in the industrial town of Thika, is expected to produce cars for Kenya as well as the rest of East African market. The first car to be rolled out is the Polo Vivo, the company’s most successful passenger car model in Sub-Saharan Africa.

The President of Kenya, Mr. Uhuru Kenyatta said that the investment made by Volkswagen was in line with his government’s policy to industrialise the country's economy.

"With the opening of this facility, I expect to see a lot of Volkswagen government vehicles. I hope the county governments will also buy Volkswagen cars," Kenyatta said.

A recent report by Deloitte Africa Automotive Insights, highlights a rise in income in Kenya as the driving force behind motor vehicle sales, accounting for 1.5% of the consumer expenditure in 2015.

Passenger vehicles came fourth on Kenya’s import list of 2014 as imported car volumes grew 300% between 2003 and 2012. Majority of the imports are second hand cars from Japan or the UAE.

"If the current trend of 10 percent to 12 percent growth per annum on vehicle imports is to be maintained, Kenya will have five million vehicles on the road by the year 2030," reads the report.

According to Deloitte, Kenya at the moment does only small scale assembly of motor vehicles at 3 plants, all of which are operating below capacity.

App-based project in Rwanda

At the same time, another top Volkswagen executive was in Rwanda to launch its "app-based mobility solutions" project.

"What we have in Africa is a lot of need for mobility but in certain regions maybe not the affordability to go in a full ownership of a vehicle," said Thomas Schaefer, CEO of Volkswagen Group South Africa.

The company had looked at ways to solve this problem and came up with a pilot project that will involve a company owning vehicles which allows customers to pick them up at one point and drop them off at another, similar to the systems in Berlin, London and Paris.

"We will make passenger vehicles not only available for the market to buy but also for the shared service that now is increasingly becoming the trend in many cities of the world," said Francis Gatare, CEO of the Rwanda Development Board.

Part of the project also involves the construction of an assembly plant in Kigali.

Rwanda does not have an established vehicle industry but does possess a population with an average age of under twenty and a commitment to clean energy.

Volkswagen said it was also mulling introducing electric cars into the country.

"Rwanda is well-suited to be a pioneer of new mobility solutions as it has a population of young tech-savvy people and its capital Kigali is seen as the most connected city in Africa," said Schaefer.

An investigation phase will continue till May this year and the company plans to have the first cars assembled in Rwanda by the end of 2017.

As is the case in Kenya, the amount of investment and production capacity has not been revealed.

Deloitte sees Africa as the "final frontier" for the global automotive industry, with its enormous growth potential.

The motorisation rate on the continent is only forty four vehicles per thousand inhabitants compared to a global average of one hundred eighty vehicles per thousand inhabitants.

Posted on : 22 Nov,2024 | News Source : ABNews