Big news for Rwanda this week! Volkswagen has officially opened up a factory in Kigali, making this the country’s first ever car plant. VW plans not only to sell cars, but also the goal is to create something similar to Uber to have the country’s very own car sharing system. The first model to be sold is the Polo, then with expansions to the Passat, Tiguan, Amarok and Teramont models. The plan for the German vehicle is to reach a total of 5,000 cars sold annually, and who knows what else the future holds for the country.
Car sharing system similar to Uber
The number of individuals owning a car is low, and has only reached a total of 200,000 cars being owned since 1997 (keep in mind there are 12 million people living in the country). As of right now, the majority of the cars are actually imported from other countries, such as Japan. However, Volkswagen has a strategy it hopes will take off. So far, there are no car sharing apps in the country, however Volkswagen plans to change that. They want to create something similar to Uber, where individuals can request a ride simply from their phone.
Growth in nearby countries
What’s promising is that there has been growth in the automotive sector in nearby countries such as Nigeria and Kenya. In the past three years there has been a combined total of 15,000 units sold. Although there is relatively small car demand in Africa, these numbers show that it is indeed growing. There is also a VW plant in South Africa which has the ability to build up to 170,000 cars every year. The VW plant will also be getting car components shipped from South Africa to Rwanda through Kenya.
Positive for Rwanda’s economy
The VW plant is definitely a step in the right direction for the country, especially for its economy. This $20 million investment will be creating jobs for up to 1,000 people. President Paul Kagame, who also attended the grand opening event, has exclaimed how this will be a turning point and new chapter for the country as it reflects a positive economic transformation. This exemplifies how this is a positive progression for the country. Kagame also explains how, “The VW plant is as an example of much needed spending by overseas firms in the nation, which receives $1 billion in foreign aid and development assistance but is making business-friendly reforms.” Overall, this is highly exciting news for not only Volkswagen, but also for Rwanda.