40 years after it closed its original plant in the country, Volkswagen’s new vehicle production facility in Kenya began production this February.

The new factory receives part assembled Polos and Vivos from Volkswagen South Africa’s (VWSA) Uitenhage assembly plant in the Eastern Cape for final assembly. It will handle 1,000 cars this year, increasing over time to 5,000 units.

Ethiopia already produces about 8,000 vehicles a year using imported kits in very small plants.

BMW, Ford and Toyota have all increased their operations in South Africa over the past few years. South Africa exported 173,000 vehicles to Europe in 2016, up from 116,000 in the previous year, and forecasts show that production will rise by 48% to 900,000 units a year by 2020.

Other companies, such as Toyota, Nissan and Mitsubishi already have similar facilities in Kenya, mainly producing buses and trucks rather than cars. Total production stands at about 10,000 units a year, according to the Kenya Vehicle Manufacturers Association (KVMA).

Volkswagen also plans to launch a ride-hailing service, along the same lines as Uber, in Rwanda, possibly using an electric version of the Golf.

Morocco has followed a similar pattern to South Africa, offering incentives for foreign companies and developing Tanger Med as an export port for the sector. As a result, output increased from 100,000 vehicles in 2012 to 348,000 in 2016.

Read the full article at: Africa Business Magazine