Volkswagen South Africa’s previously announced plans for an operation in Rwanda kicked into high gear in the capital, Kigali, today with the formal registration of the company Volkswagen Mobility Solutions Rwanda.
This means the roll out of Volkswagen’s integrated automotive mobility solution, a first for the Volkswagen Group, under the auspices of Volkswagen Group South Africa (VWSA), which is responsible for the Sub Saharan African Region.
Thomas Schaefer, Chairman and Managing Director of Volkswagen Group South Africa, says: “In December 2016 Volkswagen signed a Memorandum of Understanding (MOU) with the Rwanda Development Board (RDB) to conduct a detailed study to develop a business case for Volkswagen to introduce an integrated automotive mobility concept in Rwanda, which would be a first for Volkswagen worldwide.
“Our studies are complete and we believe we have a business case that will work and we are now ready to commence with the implementation of our plans for Rwanda. In short after today there is no going back, we are now fully committed to implementing our unique integrated automotive mobility solution in Rwanda together with Rwandans.”
VWSA chose Rwanda as the country in Africa to study the feasibility of an integrated automotive mobility solution for the following reasons:-
- There is political stability and zero tolerance for corruption
- There is dynamic economic growth of some 7% per annum
- There is a young and tech savvy population
- Rwanda is a leader in innovation and technology
- Volkswagen have received strong support for our plans from Government and had great cooperation and support from the RDB
- There is a real need for modern mobility solutions
- Kigali is spearheading the smart city agenda
Volkswagen will adopt a phased approach in the implementation of the integrated automotive mobility solution and the first phase will focus on:
- Establishing a local Mobility Services company
- Oversee the establishment of a Volkswagen manufacturing and sales entity
- Set up a vehicle assembly operation
- Establish a sales and service structure
- Set up a training centre
- Offer the new mobility solution
“The production facility will have an initial annual installed capacity of up to 5 000 units, with 2018 being our start-up year. The Volkswagen product portfolio will initially include the Hatchback Polo, the Passat, a sedan and possibly the Teramont, a large SUV,” says Schaefer.
Volkswagen will run the production and retail operations, which will include the importation of other Volkswagen models to be sold on the Rwandan market.
The current business plan assumes employment of between 500 and 1 000 people in Kigali in phase one for Mobility Solutions admin, production, training, sales and service and the drivers..
A Rwandan software development start-up company Awesomity Lab has been appointed to develop the mobility App. Volkswagen is also in negotiation with other potential Rwandan suppliers.
The first service to be offered will be community car sharing, which will launch in quarter two, with around 150 vehicles in service within a few months. This will be followed by a ride hailing service with some initial 150 vehicles planned in the medium term still in 2018.
In 2019 public car sharing with some initial 250 cars planned will be launched and this will be followed by a shuttle service and lastly a peer to peer car sharing service is envisaged. These numbers are based on assumed market demand, as such an innovative integrated mobility solution is a first for the automotive industry.
All the mobility services will be accessed by the custom developed App through which all bookings and payment will be made. Services will also be able to be booked online or via a hotline to cater for people who do not have a smartphone.
Some US $20-million (R246-million) will be spent in Rwanda by VWSA during phase one of the integrated automotive mobility solutions.
“We are delighted with the progress that has been made since we signed the MOU with Volkswagen in 2016. We are ready to partner with Volkswagen as they implement their integrated automotive mobility solutions as well as vehicle assembly operation in Rwanda.
“Our country is determined to become the leading innovator in Africa. This project is in line with Rwanda’s policies to protect the environment, create jobs, and reduce our trade deficit. We are confident that this partnership will help create countless opportunities for young Rwandans not only in terms of employment but also in terms of skills transfer,” says Clare Akamanzi, CEO of the RDB.