German carmaker VW to set up assembly plant in Rwanda

President PAUL Kagame yesterday received Chairman of Volkswagen, Dr Herbert Diess, and Thomas Schäfer, the chief executive of Volkswagen South Africa, following the signing of an agreement between the German carmaker Volkswagen and the Government of Rwanda to explore the setting up a local assembly plant in Rwanda.
President Kagame meets with the Chairman of Volkswagen, Dr Herbert Diess (second left), Thomas Schafer, chief executive of Volkswagen South Africa (second right), German Ambassador....
President Kagame meets with the Chairman of Volkswagen, Dr Herbert Diess (second left), Thomas Schafer, chief executive of Volkswagen South Africa (second right), German Ambassador....

President PAUL Kagame yesterday received Chairman of Volkswagen, Dr Herbert Diess, and Thomas Schäfer, the chief executive of Volkswagen South Africa, following the signing of an agreement between the German carmaker Volkswagen and the Government of Rwanda to explore the setting up a local assembly plant in Rwanda.

The memorandum of understanding (MOU) in line with the agreement was signed between Rwanda Development Board (RDB) chief executive Francis Gatare, and Thomas Schäfer, the chief executive of Volkswagen South Africa.

Schäfer told journalists that the firm will have accomplished its market research in Rwanda by May next year following which an assembly plant producing at least 5,000 vehicles per year could be set up in Kigali by the end of 2017.

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 Schäfer (L) and Gatare exchange paperwork yesterday. (Timothy Kisambira)

The move is part of Volkswagen’s plan to develop markets in Africa and it came immediately after the firm inaugurated its third production facility on the continent in Kenya, yesterday, while two others are operational in Nigeria and South Africa.

“Today, in Rwanda, we are launching a concept that will foster individual mobility in this rapidly developing country and make this market a further pillar of the Volkswagen brand’s commitment to Africa,” Schäfer said.

The agreement will enable Volkswagen to start assembling cars in Rwanda that are easy to maintain and that are low on fuel consumption and gas emission while also making it easy for Rwandans to access and use the vehicles.

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Thomas Schäfer, the Chief Executive Officer of Volkswagen South Africa (L) exchange documents with RDB Chief Executive Officer, Francis Gatare. (Timothy Kisambira)

Gatare said the project is in line with Rwanda’s policies to protect the environment, create jobs, and make Rwanda a pioneer in technology and innovation.

“We welcome Volkswagen and its innovative approach to mobility concepts in Rwanda. The signature of this memorandum of understanding today is a further step on our path to digitalisation and modernisation,” Gatare said.

In South Africa, the carmaker is a major contributor to foreign direct investment, technology transfer, job creation, and skills development.

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Thomas Schäfer, the Chief Executive Officer of Volkswagen South Africa (L) speaks to media after the signing ceremony as RDB Chief Executive Officer, Francis Gatare looks on. (Timothy Kisambira)

The same will happen in Rwanda if the company sets shop here, officials said, with local engineers getting training and working in both the assembling plant and service centres that the firm will set up across the country.

“The project will not only bring a plant to assemble Volkswagen cars but also service centres to handle repairs. This is the kind of car people should start getting ready to buy,” Gatare said.

Under the agreement, Volkswagen cars that will be up for lease or purchase in Rwanda will have to be entirely from local production, essentially creating jobs in the country.

Volkswagen South Africa said that it is forging ahead with the initiative in Rwanda together with Volkswagen’s Kenyan partner DT Dobie based on its current experience from the establishment of a production plant in Kenya.

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Thomas Schäfer, the Chief Executive Officer of Volkswagen South Africa (L) signs the memorandum of understanding with RDB Chief Executive Officer, Francis Gatare. (Timothy Kisambira)

In line with Volkswagen’s commitment to Rwanda and the training of local people, the firm has pondered the possibility of cooperation with other German companies to establish a local technical academy to ease transfer of technology and skills, its officials said in a media release related to yesterday’s agreement with Rwanda.

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RDB Chief Executive Officer, Francis Gatare speaks to media as Thomas Schäfer, the Chief Executive Officer of Volkswagen South Africa (L) looks on. 

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