Jun 29, 2018 Ride sharing, vehicle manufacturing, Africa, Jobs, Volkswagen, VW, Integrated Mobility Solutions
Volkswagen has made a significant move in its African strategy, opening its Intergrated Mobility Solution in Rwanda. The automaker's CEO Thomas Schäfer was at the official project launch in Kigali along with the country's President Paul Kagame.
“Rwanda has great potential," says Schäfer. "The country is young, modern and hungry for individual mobility. With a package specifically tailored to the region comprising local vehicle production, new vehicle business and innovative mobility services, we intend to harness the opportunities for growth and create new opportunities. Rwanda can become a blueprint for other African and emerging market countries.”
President Kagame commented: “Africa does not need to be a dumping ground for second hand cars, or second hand anything. In the long run, you end up paying a higher price anyway. If you can pay a high price for second hand, why not pay a high price for something new? It is a simple choice. Africans, Rwandans, we deserve better. This is one way of showing how we can afford it. For these and other reasons, this promising partnership with Volkswagen is off to a good start.”
German Federal Minister for Economic Cooperation and Development, Dr. Gerd Müller, agreed, adding: “Volkswagen’s new project in Rwanda is the kind of activity we would like to see copied by other German companies. We want many more of them to launch new business ventures in Africa. Volkswagen has brought good ideas and a generous dose of pioneering spirit to this project and together with its German and Rwandan partners is developing a viable mobility concept for the future for Rwanda. We are pleased to support this project through Germany’s development cooperation. These companies are making a direct contribution towards sustainable economic development – and that is totally in keeping with the idea of our Marshall Plan with Africa. The only way for people in Rwanda and in other places to have an attractive future in their own countries is if they can be offered high-quality training and good jobs where they are.”
The project centres around app-based car sharing and ride hailing offerings, which the automaker explains take individual mobility to a broader share of the population. The first stage of the project involves community car sharing, primarily aimed at companies in the capital Kigali, which will be followed later in the year by a ride hailing service. Further mobility services are planned for 2019. VW believes that Rwanda is the ideal market for new mobility solutions, thanks to its digitally-minded and tech-savvy population. Moreover, demand for mobility is growing and the present offerings can scarcely keep pace with these needs.
The project also involves a production aspect - local assembly of the latest-generation Polo and Passat will now commence with other models planned for the future. Initially it is planned to build up to 1,000 vehicles per year depending on demand and the success of the mobility fleet, with an annual production capacity of up to 5,000 units. Assembly is flexibly designed and can be expanded further if required. The sales and service retail outlet CFAO Volkswagen Rwanda is part of the same complex and guarantees comprehensive customer service. Volkswagen will spend some US $20 million in Rwanda for phase one.
The brand says that it will also be significantly expanding its engagement in Africa with its long-term goal being its playing a leading role in the emerging automotive industry in Africa. To that end, the the automaker will be establishing several pillars in the region and pursuing rapid and flexible expansion over the coming years. That will lay the foundation for participating in the region’s future growth. In addition to Rwanda, Volkswagen is already active in South Africa, Nigeria, Kenya and Algeria. Further locations are already being planned.
Schäfer commented: “Volkswagen is one of the pioneers in Africa. Over 60 years ago, Volkswagen established its first plant outside of Germany in South Africa and now we are the first in the Sub-Sahara region. Obviously there are some challenges, but there are great opportunities as well. By starting out with several, smaller operations we can learn and respond flexibly to developments. At Volkswagen, we believe in Africa.”
The project will see the creation of up to 1,000 new skilled jobs and will include the creation of a qualification and training centre together with other German companies. Employees working in the assembly operation have been trained by qualified Volkswagen instructors in Kenya and are ready to commence with production. Drivers for the mobility services will shortly be recruited and trained by Volkswagen and specialists in this field. Furthermore, Volkswagen collaborates with local partners and suppliers wherever possible. The app for the digital mobility services was developed by a startup based in Kigali.
As Thomas Schäfer explained: “Rwanda and Africa are much more than just another market for us. We see ourselves as part of African society and want to be a good, reliable partner for people here – as at all of the Volkswagen Groups 122 locations worldwide.”
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