Volkswagen returns to Kenya after four decade production hiatus
German car maker Volkswagen has made a comeback in Kenya after four decades production hiatus with an announcement that it will make the first car in the country by December this year.
In a move meant to expand its footprint in the East African region, the auto giant announced it will establish an assembly plant to initially produce its Vivo model in collaboration with local carmaker Kenya Vehicle Manufacturers (KVM), in which the government is a major shareholder.
VW, which assembled cars in Kenya in the 1960s and 1970s, will join other brands already being put together in the country, including Isuzu, Toyota, Nissan, and Mitsubishi.
The East African Community has got the potential, and today is the first step in this direction that we want to take with our passenger cars," Volkswagen South Africa chief executive Thomas Schäfer said.
According to VW, it was planned to initially assemble up to 5,000 Polo Vivo models, making Thika the carmakers’ third production site in Africa, after South Africa and Nigeria.
"I am happy to welcome back the Volkswagen Group, currently the largest car manufacturer in the world, back to Kenya," said President Uhuru Kenyatta after meeting VW executives in Nairobi.
President Kenyatta further added that the partnership will fast track the country’s ambitions of becoming a manufacturing hub while providing jobs.
“This I believe decent jobs for Kenyans and their families. It means not only joining consumption of imported goods but their production here at home so that their hard earned money can uplift more Kenyans,” he added.
Kenya mostly assembles trucks, pick-ups and buses from kits supplied by foreign manufacturers, although data from the Kenya National Bureau of Statistics showed that the number of vehicles assembled between January and April was down 31 per cent year-on-year to 2,258 vehicles.
But government in a bid to entice more investors scrapped a 20 per cent tax on on locally assembled vehicles in a bid to attract investors a move pundits say is finally paying off if return of companies like VW is anything to go by.
