Taking a giant step northwards, Volkswagen SA’s entry into the Kenyan car market signals not just the establishment of a new production facility there, but the start of the development of a new passenger vehicle market in East Africa.
While Kenya has an established truck and commercial vehicle market, its passenger car market has long been characterised by “grey imports”, predominantly from Asia.
Grey imports are defined as new or used vehicles legally imported from another country through channels other than the maker’s official distribution system.
But Volkswagen – which last week announced a joint venture establishing a new production facility for the company’s and South Africa’s top selling Polo Vivo model in Thika, near Nairobi – plans to play a key role in developing the new car market there.
As part of its drive towards the regionalization of its global automotive business, Volkswagen is expected to start production of the compact model at the end of the year.
The agreement for the new facility was signed in Nairobi last week by the Kenyan government and VWSA chairman and managing director Thomas Schaefer.
The project, a joint venture with importer D T Dobie, will be Volkswagen’s third production facility in Africa and is expected to produce up to 5 000 units of the Polo Vivo a year from next year.