Volkswagen targets to produce 2000 units by the end of this year in their Rwanda based assembly factory. Thomas Schaefer, head of VW South Africa, revealed that he would be more pleased to reach 10, 000 units produced in Rwanda.
The Rwandan based VW production factory is set to start operations in June this year. Among the first models expected to be produced include the Terramont, Polo, and Passat cars. Volkswagen is also aiming at expanding to other markets in Africa including Ghana, Ethiopia, and Tanzania as part of its long-term market expansion plan.
VW resumed production in Nigeria in 2015 after the country’s economy was hit hard by crashing crude oil prices in 2014. Nigeria’s economy is now recovering as the global crude oil prices stabilize. VW sold only 40 units in Nigeria, in 2017. This year, the company hopes to produce about 100 units in the country.
Comparing the Nigerian and Rwandan markets, Nigeria would naturally seem to be the most potential due to its increased population to over 160 million, therefore, increasing demand for cars. However, Rwanda fares better on a macroeconomic level with only a total population of 11 million. Rwanda recorded the Real GDP growth at 8.9 percent compared to Nigeria which registered 2.1 percent in 2018. A higher growth rate means that people are more capable of purchasing cars.
Volkswagen also established an assembling plant in Kenya situated in the industrial area of Thika. President Uhuru Kenyatta of Kenya welcomed VW as part of his Big Four plan of development of the country in his last term in office.