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January 19, 2018

VW establishes mobility company in Rwanda

VW has founded Volkswagen Mobility Solutions Rwanda to provide modern integrated mobility services in Africa.

VW has founded Volkswagen Mobility Solutions Rwanda to provide modern integrated mobility services in Africa.

This is part of a worldwide regionalisation strategy which includes plans to expand business "significantly" in sub-Saharan Africa. Agreements to that effect were signed in Kigali just over a year ago.

The brand will focus on new app-based mobility services such as car sharing and ride hailing in Rwanda. This year sees the launch of a car sharing service in the capital city of Kigali with around 150 vehicles. A ride hailing service with 150 vehicles is also scheduled to start during the course of the year. These figures are derived from expected market acceptance of these innovative mobility services that are completely new to the country. Further services of this kind are planned.

The vehicle fleet required will come entirely from local production so VW will establish local assembly in Kigali. Volkswagen and CFAO, a long-standing partner in Africa for the distribution and assembly of vehicles, have signed a letter of intent and production will start with several hundred vehicles in mid-2018 with capacity to be expanded to up to 5,000 vehicles a year. Polo and Passat models will be built first.

A local start-up is developing programming for the mobility app. Overall, VW and its partner companies will create up to 1,000 jobs in Rwanda at a cost of about US$20m (EUR16m).

"Rwanda is a young, modern and digital country so it is ideally suited to new connected mobility services. We hope to put the valuable experience gained with ride hailing in Rwanda to use in other markets where the brand has a presence," said VW South Africa chief Thomas Schafer whose company is responsible for the region comprising 49 countries with a total population of 920m.

The possibility of cooperation for the establishment of a technical academy is being investigated together with other German companies. In the long term, the objective is to generate employment, know how transfer and sustainable growth.

Rwanda does not currently have an established vehicle industry. The population has an average age of less than 20 years and Rwandans are early adopters of new technology.

In addition to Rwanda, the Volkswagen brand is also active at three other locations in the Sub-Sahara region: the company has been manufacturing vehicles in South Africa since 1951. Vehicle assembly began in Nigeria in 2015, and in Kenya in December 2016.

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