5 September 2017

Rwanda: New VW Plant to Start Production With 1000 Cars Annually

Plans to set a Volkswagen (VW) manufacturing plant in Rwanda are in the final stages.

According to Thomas Schäfer, the chair and chief executive of Volkswagen Group South Africa, the German carmaker plans to go operational by the end of the year.

Schäfer said the plant will start by producing at least 1,000 cars annually.

The production will be adjusted based on the demand for the vehicles.

"We want to start small. We will probably be doing like a thousand in the beginning. Because we understand that the car market in Rwanda is about 2,000 to 3,000 cars per year. Of course, that is not enough for now, but we will strive to ensure that we work as a local manufacturer competing with imported cars," Schäfer said.

In December, last year, an agreement was signed between VW and the Government of Rwanda, upon which VW carried out a feasibility study that, Schäfer said, "showed potential."

"It is a complicated process with a lot of procedures but now we are at the end of it and it looks very promising so we are ready to go. We will be manufacturing cars in Kigali," Schäfer told The New Times.

Schäfer spoke to this paper shortly after naming a baby gorilla at the annual Kwita Izina ceremony in Musanze District on Friday.

"We hope that we will start by the end of this year or early next year. What is remaining should take a us few months," he added.

Schäfer said the feasibility study went well, hence the optimism that the remaining work will be done sooner than later to pave way for the car-manufacturing plant to start operations.

The Rwandan plant will produce environment-friendly cars.

Efficiency

The agreement signed by two parties permits Volkswagen to start assembling cars in Rwanda that are easy to maintain and that are low on fuel consumption and gas emission while also making it easy for Rwandans to access and use the vehicles.

The project is in line with Rwanda's policies to protect the environment, create jobs, and make Rwanda a pioneer in technology and innovation.

"Rwanda is a most amazing country; you have got processes that are super organized. I think Rwanda will be the blueprint for Africa. If we can get in right here, we will get it right in all other places in Africa. But Rwanda will be the first place," Schäfer said.

Under the initial agreement, the Volkswagen cars will be up for lease or purchase in Rwanda and will have to be entirely from local production, essentially creating jobs in the country.

In line with Volkswagen's commitment to Rwanda and the training of local people, the firm is also looking to linking with other German companies to establish a local technical academy to ease transfer of technology and skills.

"With great training and creating more jobs, at the end of the day we will be manufacturing environmental-friendly brand-new cars and we look forward to getting started here," Schäfer said.

The move is also part of Volkswagen's plan to develop markets in Africa and it came immediately after the firm inaugurated its third production facility on the continent in Kenya, while two others are operational in Nigeria and South Africa.

In South Africa, VW is a major contributor to foreign direct investment, technology transfer, job creation, and skills development.

Rwanda

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