Nairobi — Track manufacturer Volvo Group is set to invest a Sh2.5 billion assembly plant in Mombasa eyeing the East African region market.
This will be the third assembly in Africa after plants in South Africa and Morroco.
Volvo Trucks President Claes Nilsson says the plant will be launched in the first quarter of 2018 targeting an output of 500 units per year.
Nilsson says the firm will bring to the market top modern trucks that have specifications for the east African region.
"We see great opportunities and believe that this part of Africa that has potential to grow substantially; it has a lot of different resources due to the diverse production of different products and natural resources," Nilsson told Capital FM Business.
"Business conditions here is that you have to have a manufacturing plant, unless you do that, you are not a serious player in this market."
The plant will be done through a partnership with NECST Motors who are now the exclusive importers of Volvo trucks in the Eastern African region.
The planned investment is expected to create approximately 300 direct jobs in addition to other indirect employment opportunities.
The firm is eyeing 20 percent market share in the next three to five years.
"We have been in East Africa for the last three decades and believe that there is a significant potential for the premium truck business as regional economies grow, infrastructure investments expand and the business environment remains investment friendly," Nilsson said.
Volvo Trucks regional office has been opened in Nairobi which will be responsible for expanding the footprint of the brand in East Africa.
"The willingness and desire by the government to invest in infrastructure is necessary to use our products that are premium and heavy duty used for transportation," he noted.
The firm has over 20 percent market share in Morroco and 18 percent market share in South Africa. Overall the firm has about 15 plants worldwide.
In 2016, the firm sold 103, 000 trucks in 128 different countries with the turnover hitting Sh3.6 trillion.
The move comes even as French car manufacturer Peugeot promised a return to Kenya and it is set to assemble 5 of its models beginning June this year.