Volkswagen is bullish on expansion in the sub-Sahara region of Africa. During German Chancellor Angela Merkel’s visit to Africa, Volkswagen signed two memorandums of understanding with the governments of Ghana and Nigeria. The carmaker has announced plans to build plants in both countries and to explore the development of new mobility solutions in Ghana.
Commenting on the MoUs, Thomas Schaefer, Head of the Volkswagen Sub-Saharan Region, “Both memorandums of understanding demonstrate one thing: the seriousness with which Volkswagen takes its commitment to Africa. We are well positioned. The situation on the continent has stabilised, and the economy is moving forward. The final hurdles for the development of the automotive industry there have been removed as a result. This is a great opportunity for us.”
Assembly plant and training academy in Ghana
An assembly plant is scheduled to be built in Ghana. This would also include developing a sales and service network in Ghana as well as establishing a Training Academy for production and aftersales.
In addition, Volkswagen is to commence a feasibility study in Ghana for integrated mobility solutions which will include a review of the commercial viability of introducing rental, car sharing, ride hailing and shuttle services by way of a Ghanaian subsidiary of VWSA (Volkswagen South Africa), or the appointment of a local service provider.
In turn, the Ghanaian government aims to develop a comprehensive Ghana Automotive Industry Policy which will incentivise vehicle manufacturing in Ghana. This includes a preferential procurement policy for locally assembled vehicles.
Nigeria as an automotive hub
For Nigeria, Volkswagen has committed itself to expanding automaking operations on a step-by-step basis and turning the country into an automotive hub on the western coast of Africa over the long term.
This will include developing a training academy in conjunction with the German government which will train the initial employees and also provide broader technical training for the community in automotive skills. It is also intended that a comprehensive Volkswagen vehicle and service network is developed in the country subject to commercial viability.
In return, the Nigerian government has pledged to accelerate the passage of Nigerian automotive policies. This includes the gradual transition from the importation of used cars to the manufacture and distribution of new passenger vehicles.
Volkswagen already has a plant in South Africa and also builds cars in Kenya and recently began to make them in Ruanda, where community car sharing is already being offered as an integrated mobility solution and where ride hailing will also be provided soon.
Under its TRANSFORM 2025+ brand strategy, Volkswagen says it is strengthening the regions and focusing on new up-and-coming markets. Alongside North and South America as well as China, the Sub-Sahara region plays an increasingly important role. Although the African automotive market is comparatively small today, the region could develop into a growth market of the future.