VW to launch ride hailing in Rwanda as part of Africa expansion

SB Technology

22/12/2016 14:47

FRANKFURT, Dec 22 (Reuters) - Volkswagen  VOWG_p.DE  plans 
to start a ride-hailing service in Rwanda in a sign of how the 
German carmaker is developing pay-per-use transportation models 
in new markets where rival Uber  UBER.UL  has not yet gained 
traction.       
    Emerging markets with poor transportation links have become 
a key battleground for establishing new mobility services, with 
Uber competing with newer rivals like Ola, backed by Japan's 
Softbank  9984.T , and China's Didi Chuxing.  urn:newsml:reuters.com:*:nL1N1DM1IH 
    Volkswagen, which is developing electric vehicles and new 
services as it tries to put its diesel emissions scandal behind 
it, said on Thursday said it had signed a memorandum of 
understanding in Kigali, the Rwandan capital. 
    "Volkswagen wants to strengthen its presence in emerging 
markets. That is why Africa ranks high on our agenda," said 
Volkswagen brand chief Herbert Diess. 
    Rwanda is seen as a good market because competition is less 
intense. Uber operates in several African countries, including 
Kenya where it launched in early 2015 and now faces local 
rivalry.  urn:newsml:reuters.com:*:nL8N19R365 
    Volkswagen expanded into ride-hailing in May, when the 
German carmaker invested $300 million in Gett, a firm which 
seeks to outmanoeuvre Uber by refusing to apply "surge" pricing 
at peak traffic times.  urn:newsml:reuters.com:*:nL3N18L4N2 
     
    AFRICA PUSH 
    Volkswagen said it had also agreed to set up a vehicle 
production facility in Rwanda, deepening its local manufacturing 
operation in Africa where it expects vehicle sales to grow by 40 
percent within the next five years.  
    Volkswagen did not say which models it would make in Rwanda 
but said it would explore using electric versions of the Golf in 
the local mobility services business.  
    Volkswagen has been producing cars in Africa since 1951, 
when it started making the VW Beetle in South Africa. 
    VW this week said it would start making the Polo Vivo in 
Thika, Kenya. VW will also produce the VW Golf as well as 
several models from Seat, Skoda in Algeria from 2017 onwards. 
     
 
 (Reporting by Edward Taylor; Editing by Keith Weir) 
 ((Edward.Taylor@thomsonreuters.com; +49 69 7565 1187;)) 
 
Keywords: VOLKSWAGEN RWANDA/RIDEHAIL