Volkswagen Set To Launch A Ride-Hailing Service And Vehicle Assembly Plant In Rwanda In 2017

As part of their Afrika expansion, Volkswagen is entering the ride-hailing space in Rwanda with the launch of a new 'integrated mobility concept' in Kigali, following the signing of a memorandum of understanding between Rwanda's President Paul Kagame and Volkswagen CEO Dr Herbert Diess.

The partnership will see the launch of a number of app-based mobility solutions such as car sharing and ride-hailing, and Volkswagen will set up a vehicle production facility in Kigali to cover vehicle demand.

The planned facility will produce the VW Golf as well as several other models from Seat and Skoda, which are owned by Volkswagen.

This development comes with VW still lingering on most people's minds following their much-publicized carbon emissions scandal. As such, it seems VW is looking to put further focus on its electric vehicles as it announced that the Rwanda ride-hailing service will utilize electric VW Golfs once launched.

"Volkswagen wants to strengthen its presence in emerging markets. That is why Africa ranks high on our agenda,"Herbert Diess, Brand Chief at Volkswagen

VW's entry into the ride-hailing space comes after they invested $300 million in Gett in May 2016. One of Gett's differentiators from popular Uber is that it doesn't use "surge" pricing during peak demand times.

"There will be an investigation phase which will go on from January until April and May (2017) until we have the final business model together. If it all looks good, we will move ahead with assembly of the first batch of cars by the end of the year," VW South Africa Chief Executive Thomas Schaefer said in a news conference.

Kigali presents a less competitive market for VW's ride-hailing experiment compared to Johannesburg, Cairo, Lagos, and Nairobi, where there are already a number of established players in operation. Rwanda, the company's press statement added, is well-suited to be a pioneer of new mobility solutions as it has a young, tech-savvy population, and its capital Kigali is seen as one of the most connected cities in Africa.

Apart from the timelines for the investigation period, no further details were revealed. VW aims to use Rwanda as a test case for the use of electric vehicles in the developing world, with plans to introduce models such as the e-up! and the e-Golf.

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