Volkswagen will resume producing cars in Kenya by the end of the year as it looks to sell more vehicles across the East African region.
After a four-decade pause in production in Kenya, VW would establish an assembly plant to initially produce its Vivomodel, President Uhuru Kenyatta and Volkswagen South Africa chief executive Thomas Schafer said.
Emerging market production is familiar territory for VW, whose familiar Beetle model was a favourite on the streets of Mexico, but Kenya’s car market is dominated by low-priced second-hand imports from countries such as Japan.
VW, which assembled cars in Kenya in the 1960s and1970s, will join other brands already being put together in the country, including Isuzu, Toyota, Nissan and Mitsubishi.
“Volkswagen South Africa will now again establish an assembly plant to produce motor vehicles at the Kenya Motor Vehicle Manufacturers Limited in Thika,” Kenyatta said yesterday after meeting Volkswagen South Africa executives.
Kenya mostly assemble strucks, pick-ups and buses from kits supplied by foreign manufacturers ,although data from the Kenya National Bureau of Statistics showed the number of vehicles assembled between January and April was down 31% year on year to 2 258 vehicles.
The Kenya Vehicle Manufacturers Association attributed the slowdown to tough economic conditions for buyers, including high interest rates and cuts in government spending, while Volkswagen said it saw opportunity in the market.
“We believe Kenya has the potential to develop a very big fully-fledged automotive industry,” Schafer said.
“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.”