Rwanda: Volkswagen Rwanda Assembles 55 Vehicles

Some Volkswagen cars in a workshop (file photo).

Volkswagen has a target to produce about 1000 cars annually for its operations in the mobility solution as well as sales.

Volkswagen Rwan da will have assembled a total of 90 cars by end of March to meet demand on the local market.

The firm, which launched operations in Rwanda in June last year, has so far assembled 55 vehicles and has another 35 set to be complete in the course of the month, officials say.

The firm has a target to produce about 1000 cars annually for its operations in the mobility solution as well as sales.

At the moment, it says that the Sports Utility Vehicle (SUV) models such as the Terramont and Amarok are more in demand in the local market. Michaella Rugwizangoga, the Chief Executive of the company's operations in Rwanda, said that over the last eight months, they have been building capacities of local engineers handling assembly as well as set up the plant to produce to capacity.

At capacity, she said, the assembly of a vehicle can take about two days on average.

However, the process requires shipping in of Semi Knocked Down vehicles for assembly.

SKD, or Semi Knocked Down, is whereby finished vehicles are broken down into a very limited number of parts and shipped in for assembly.

The components of the cars are shipped from various markets such as South Africa, the US and Argentina.

The firm, which is making an investment of $20m in the first phase of its entry into the local market, noted that, currently, the highest costs are in logistics cost of shipping in the components.

Of the 35 cars to be complete and ready for the market by end of the month, the majority will be the Terramont model. This, the firm said, is in response to demand.

The Terramont retails at $48,156 (about Rwf 41m) while Volkswagen Amarok (the pick-up truck) goes for $44,559 (Rwf 38m).

VW Polo model, the most affordable of the locally-assembled option costing $23,881 (Rwf 20.5m) all taxes included. Volkswagen Passat retails at $37,674 (Rwf 32.3m) while Tiguan, which is a sports utility vehicle, is sold at $37,719 (about Rwf32.4m).

The firm, is also currently engaging local financial institutions to ease car financing terms to boast ownership of vehicles. Multiple studies have shown that penetration of car ownership across the continent is often inhibited by lack of ideal credit terms by financial institutions to allow flexible credit terms for potential buyers.

Rugwizangoga said that they are engaging financial institutions in an attempt to ensure better financing models for potential car owners.

The firm is also increasing the number of cars on its ride hailing application move in the coming weeks, which will also increase the number of jobs for drivers. The application so far has 12000 downloads and 10000 complete rides.

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