Kenya will start producing high-end car in December, thanks to a turning-point deal signed with Volkswagen, one of the leading car makers in the world.
Volkswagen South Africa has signed a deal with Kenya to assemble vehicles in Thika town, making a comeback nearly 40 years after exiting the Kenyan market.
The news was broken by President Uhuru Kenyatta today, who said the German automaker would use the Kenya Vehicle Manufacturers (KVM) facility in Thika to assemble its popular models beginning with the Volkswagen Vivo.
The country’s first fully-assembled Vivo is expected to roll out of the Thika plant by December this year. President Uhuru Kenyatta said the plant would later start assembling a variety of makes. This is expected to drastically reduce the price of Volkswagen cars.
“I am happy to welcome back the Volkswagen Group, currently the largest car manufacturer in the world, back to Kenya,” said Mr Kenyatta at State House, Nairobi, where he witnessed the signing of the agreement between Kenya and Volkswagen.
“This is a milestone in my administration’s determined push to grow the manufacturing base and transform Kenya into an industrialised nation.”
The Volkswagen South Africa CEO Thomas Schafer said the company was attracted by Kenya’s potential and would use the Thika plant to export vehicles to the wider East Africa region. “We will start operations immediately,” he said.
The carmaker operated in Kenya in the 1960s until 1977 and used to assemble Volkswagen vans, microbuses and the famous Kombi.
President Kenyatta said the return of Volkswagen was a response to the government’s focus on investments in infrastructure including rail, roads and energy, regulatory and business environment reform, linking foreign direct investments to local enterprises and improving human resource capacity.
“Major investors such as Volkswagen realize that Kenya is now a more competitive investment destination, and are responding by pursuing opportunities here,” President Kenyatta said.
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