22 January 2018

Rwanda: VW to Spend U.S.$20 Million for Production Facility in Rwanda

Photo: Wikipedia
Kigali, Rwanda

Volkswagen is expanding its footprint on the African continent with the commitment to establish Volkswagen Mobility Solutions in Rwanda, which the company hails as the next milestone in its Sub-Saharan Africa strategy.

The commencement of the integrated automotive mobility solution is a first for the Volkswagen Group under the auspices of Volkswagen Group South Africa (VWSA), who are responsible for the Sub-Saharan African Region.

At a recent media briefing in Kigali, Rwanda, Thomas Schaefer, Chairman and Managing Director of Volkswagen Group South Africa confirmed the registration. In December 2016 Volkswagen signed a Memorandum of Understanding (MoU) with the Rwanda Development Board (RDB) to conduct a detailed study to develop a business case for Volkswagen to introduce an integrated automotive mobility concept in Rwanda, which would be a first for Volkswagen worldwide.

"Our studies are complete, we believe that we have a business case that will work and we are now ready to commence with the implementation of our plans for Rwanda. In short after today there is no going back, we are now fully committed to implementing our unique integrated automotive mobility solution in Rwanda together with Rwandans," said Schaefer.

VWSA says they chose Rwanda to study the feasibility of an integrated automotive mobility solution because there is political stability and zero tolerance for corruption, there is dynamic economic growth of some 7 percent per annum, there is a young and tech savvy population and Rwanda is a leader in innovation and technology

Volkswagen will adopt a phased approach in the implementation of the integrated automotive mobility solution and the first phase will focus on establishing a local Mobility Services company, overseeing the establishment of a Volkswagen manufacturing and sales entity, setting up a vehicle assembly operation, establishing a sales and service structure, setting up a training centre and offering the new mobility solution.

The production facility will have an initial annual installed capacity of up to 5000 units, with 2018 being the start-up year. The Volkswagen product portfolio will initially include the Hatchback Polo, the Passat, a sedan and possibly the Teramont, a large SUV.

The current business plan assumes employment of between 500 and 1000 people in Kigali in phase one for Mobility Solutions admin, production, training, sales and service and the drivers..

A Rwandan software development start-up company Awesomity Lab has been appointed to develop the mobility App and

Volkswagen is also in negotiation with other potential Rwandan suppliers.

The first service to be offered will be community car sharing which will launch in quarter two, with around 150 vehicles in service within a few months. This will be followed by a ride hailing service with some initial 150 vehicles planned in the medium term still in 2018. In 2019 public car sharing with some initial 250 cars planned will be launched and this will be followed by a shuttle service and lastly a peer to peer car sharing service is envisaged. These numbers are based on assumed market demand, as such an innovative integrated mobility solution is a first for the automotive industry.

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