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

SB Technology

22/12/2016 15:28

* VW to restart car assembly in Kenya 
    * VW says has agreed to assemble vehicles in Rwanda 
    * VW to launch ride-hailing services in Kigali 
 
 (Adds comments from VW South Africa Chief Executive) 
    By Aaron Maasho and Clement Uwiringiyimana 
    NAIROBI/KIGALI, Dec 22 (Reuters) - Volkswagen  VOWG_p.DE  is 
to start producing cars in Kenya and Rwanda and start a 
ride-hailing service in Kigali, as the German carmaker expands 
pay-per-use transportation business models in markets where 
rival Uber  UBER.UL  has not 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 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 it 
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 
    The German company also said it would look at using electric 
versions of the VW Golf in the Rwandan mobility services 
business. 
         
    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 elaborate on the targeted production 
volumes or mention which models would be built locally. 
    "There will be an investigation phase which will go on from 
January until April and May until we have the final business 
model together and if all looks good we will move ahead and we 
will see the first cars being assembled by the end of year," 
VW's South Africa Chief Executive Thomas Schaefer said in a news 
 conference in Kigali late on Wednesday. 
     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, re-opening a car assembly plant in Kenya after a 
four-decade hiatus. 
    The German carmaker assembled cars in Kenya in the 1960s and 
1970s and will now join a number of rivals which already have 
local assembly operations, including Isuzu  7202.T , Toyota 
 7203.T , Nissan  7201.T  and Mitsubishi  7211.T . 
    Kenya's car market is currently dominated by low-priced 
second-hand imports from countries such as Japan. It mostly 
assembles trucks, pick-ups and buses from kits supplied by 
foreign manufacturers. 
    The VW assembly plant will begin with the Vivo model and 
expand to a range of vehicles, with the first car expected to be 
produced before the end of the year, officials said. 
    VW will also produce the VW Golf as well as several models 
from Seat, Skoda in Algeria from 2017 onwards, the company said. 
 
 (Additional reporting by Edward Taylor; Editing by Keith Weir, 
Greg Mahlich) 
 ((Edward.Taylor@thomsonreuters.com; +49 69 7565 1187;)) 
 
Keywords: VOLKSWAGEN RWANDA/RIDEHAIL