The way to sell cars when most people can't afford to purchase one? That's the conundrum for Volkswagen at Rwanda, where it's opening the country's first car-assembly plant. A fresh Polo costs 33 times that the typical Rwandan revenue. Most cars on the street are second-hand imports. “Rwanda absorbs perhaps 3,000 new cars a year”, states Thomas Schäfer, VW's chief in Africa. Past projects by car makers in Africa, he acknowledges, have ended in "massive failure". The moment opens "a new chapter in Rwanda's travel", said Paul Kagame, the president after going for a demonstration model for a spin. In fact, little the manufacturing will likely happen locally, at least to begin with. VW will build its vehicles elsewhere, partly liquefy them, then put them together in Rwanda. The actual novelty is how the cars will likely be used. VW is connecting production into a ride-hailing along with also car sharing service, stocked with its own vehicles. Some people can pay to make use of a car, it reasons, than may afford to own one. In the beginning, firms and government agencies are going to have the ability to utilize vehicles that are shared; from 2019 the same service will soon be rolled out into the general public, together with cars stationed round the metropolis. Anyone with the mobile app will also can call up a lift, starting this October. The cars are useful for a few years, then sold into the second-hand sector. The $20m project will initially produce 1,000 vehicles, with capacity to turn out 5,000 units per year.
Firms such as Peugeot, Nissan and Toyota also have opened new operations in Africa, often in partnership with all neighborhood businesses. Much like VW, they are generally building knockdown kits, instead of building new cars from scratch. There's a very long road ahead. Kigali is a small, orderly place in which to examine the idea. It has recently restarted meeting in Kenya and Nigeria, later years away, and hopes to input Ghana and Ethiopia. Now, Chinese car-ownership rates were less compared to many African states today. Now, VW sells over 3m passenger cars a year there.