Executives of Volkswagen (VW) South Africa have announced that they have started the construction of their assembly plant in the Special Economic Zone in Kigali, and that the first cars could be produced in the second quarter of the year.
This follows the signature of an MOU between VW and the government to set up a subsidiary company called Volkswagen Mobility Solutions Rwanda in December 2016, which paved the way for the current $20 million (Rwf 17 billion) investment.
According to Thomas Schäfer, Chairman and Managing Director of the Volkswagen Group South Africa, the firm has already acquired a building in the SEZ where the cars will be assembled.
“We chose for Rwanda because of its zero tolerance to corruption, political stability, growth of 7%, a young and tech-savvy population, and because Rwanda is spearheading the smart city agenda, which is also part of our plans,” he said.
The firm was also attracted to establish the plant in the country by aspects in the ecosystem such as sustained growth, tech adoption and other factors.
The long term development of VW Mobility Solutions Rwanda will comprise of three phases. Phase one will include establishing the company, including the manufacturing and sales entity, set up a vehicle assembling operation, sales and service structure and training center. In this phase, the cars to be assembled in Kigali are the Polo and Passat for sedans, and the Teramont for SUVs.
The first phase will also involve the development of the new mobility solutions.
In the second phase, the objective is to increase the production volume, expand the retail network, extend the training capacity and create more mobility offices.
Phase three will involve further increase of manufacturing depth and capacity, extensive dealership in network, creating educational programs and considering exports to other East African countries.