ADDIS ABABA ( Halbeeg News)-Volkswagen brand has inked a memorandum of understanding (MoU) with the government of Ethiopia to deliver a joint vision for the development of an automotive industry in the East African country.
The carmaker said in a statement that the MoU identifies four pillars to enable the development of the Ethiopian automotive industry, namely the establishment of a vehicle assembly facility; localization of automotive components; introduction of mobility concepts, such as app-based car sharing and ride-hailing, as well as the opening of a local skills development training center.
Volkswagen sub-Saharan Africa region head, Thomas Schaefer who signed said Volkswagen intends on tapping into existing expertise and strategic resources in Ethiopia to establish a thriving automotive components industry.
“Our sub-Sahara Africa strategy is gaining momentum with the signing of the third MoU in the last six months,” notes Schaefer.
“We are grateful for the support and vision of the Ethiopian government in identifying the automotive sector as one of the key manufacturing industries that can help the country to realize its Vision 2025 goals,” he said.
Ethiopia has the world’s lowest rate of car ownership, with only two cars per 1,000 inhabitants, according to a 2014 Deloitte report.
Ethiopia becomes the third country in Sub-Saharan Africa to sign a Memorandum of Understanding with Volkswagen.
It follows Ghana and Nigeria who both signed MoUs with Volkswagen in August 2018.
In Ghana, Volkswagen will establish a vehicle assembly facility and conduct a feasibility study for an integrated mobility solutions concept. In Nigeria, Volkswagen implemented a phased approach of vehicle assembly with long term view of establishing Nigeria as an automotive hub in West Africa.
Volkswagen has been manufacturing vehicles in South Africa since 1951. In Africa, Volkswagen also has vehicle assembly operations in Algeria, Kenya, and Rwanda.