Volkswagen launches the first integrated mobility concept in the eastern African country. Local production, service, sales and new types of mobility offerings – a model for the entire region.
The colors of Rwanda’s flag are blue, yellow and green. Visitors who travel through the capital of Kigali quickly see why. The sky over the city is bright blue, and it remains that way even when a few hints of cloud slide across the panorama. The earth is yellow-brown, fine dusty accumulations of it collect on the side of the road and in cracks of the otherwise immaculately maintained sidewalks. And lush, green vegetation grows between apartment buildings and skyscrapers in the million-resident metropolis that spreads out over a countless number of hills.
If the Rwanda flag also had a sound, it would have to be the rattle of hundreds and hundreds of motorcycles that travel through the city. Motorcycle taxis form the face of Kigali’s streets. Their drivers pick their way through town, dodging buses and generally old cars, vehicles that are frequently pick-up trucks made by Japanese companies. The drivers, wearing their typical red vests that identify them as being certified, sit at the front of the motorcycles. The passengers sit behind the drivers, casually leaning back and punching messages into their smartphones as they ride.
But this picture could change – and soon. The chances are good that, not too far from now, more residents of Kigali will slip into a new car, something like a Passat, Polo, Tiguan, Teramont or Amarok from Volkswagen. The drivers will not necessarily own the cars, but they will use them - to meet their needs, either alone or together with others. They will book and pay for these mobility services by app in a fast, cashless transaction.
An automobile revolution
This is the vision, something that has prompted more than 100 guests to visit Kigali’s Special Economic Zone on this particular Wednesday. The shuttle stops in front of a brilliant white building, and a large poster announces: “Volkswagen. Moving with Rwanda.” It is the ceremony to mark the opening of the first Volkswagen factory in Rwanda. It is an event that many people in Kigali have already heard about. No matter whom you speak to, someone in the hotel or at dinner in a restaurant, they all express pride about the launch of Africa’s first integrated mobility concept. It is an automobile revolution, for Rwanda, as well as for the entire continent.
“There is no doubt about it: This facility represents the next phase in Rwanda’s economic transformation,” Rwandan President Paul Kagame said in his speech to the guests. His appearance at the event highlighted the importance of the date.
For Paul Kagame, the project that he initiated with Volkswagen 18 months earlier and that has now become a reality represents the first stage of fundamental change. “Many of the cars on our streets were built in the last century,” Paul Kagame said. “Africa should not be used as a dump for old cars or other outdated things. As Africans and Rwandans, we deserve something better. This project shows just how we can pull it off.”
In the factory hall, Paul Kagame had a chance to see what the project is all about. The tour was led by Thomas Schäfer, the CEO of Volkswagen Group South Africa and the executive who is responsible for the entire Sub-Sahara region. “Rwanda has tremendous potential,” Thomas Schäfer said. In this bright, spick-and-span hall, vehicles will be assembled on about 3,000 square meters of space. The process to be used in Phase 1 is known as semi-knockdown (SKD): Vehicles components that were partially assembled in South Africa are put together in Rwanda. The Polo is the first model that is being built locally in Rwanda.
About 1,000 jobs being created
Vehicle maintenance and repairs will also be done in the new facility in Kigali. Employees receive advanced training in special training rooms and on devices. New cars have been set up in the showroom of the sales partner CFAO Motors in the front area of the facility. About 1,000 jobs are to be created by the integrated mobility concept over the next few years. Volkswagen has invested $20 million in this project.
A large number of the vehicles that employees will assemble here on hoists will not be sold. Instead, they will be used by mobility services like Community Car Sharing, Ride Hailing and Car Sharing. Initially, employees of companies, government agencies, relief organizations and other institutions will be able to order a vehicle by app. The vehicle will be driven by a driver or by themselves. Step by step, this service will be extended to private customers who want to reserve a car or book a ride. It is a concept that Rwanda has never seen before. “This has never been tried,” Thomas Schäfer said during the tour of the facility. “We want to gain experience and learn from it.
This strategy is based on one fact: With the exception of South Africa, there is no true market for new cars on the continent. Last year, about 200,000 new vehicles were sold on the entire continent. But, especially in Rwanda, the middle class is growing, a group made up of young, well-educated and technophilic people. This group is the target group of the new mobility services.
The start of a local auto industry
“The aim has less to do with earning money,” Thomas Schäfer told international journalists who traveled to the city. “We are really talking more about creating a market. This is the start of an automobile industry.” After a year or two, the Volkswagen vehicles will end up in the used-car market and fuel demand for newer models. The model for this project is China, where Volkswagen became the first international company to produce cars locally there in 1983 and has been doing so ever since. “The early bird catches the worm,” Thomas Schäfer said.
Volkswagen – which makes vehicles in its traditional location in South Africa as well as in Kenya and Nigeria – is already talking about this option with other African countries. Rwanda won over the brand with its enthusiasm, Thomas Schäfer said. “They reacted with the most interest when we started asking people to join in something revolutionary,” he said. “They had some really clever ideas about how they could work together with us.”
Economic growth and clear objectives
Many factors show that Rwanda is the right place to implement such a strategy. The country is still trying to come to terms with a devastating event: the genocide in 1994 in which about 1 million people were slaughtered and hundreds of thousands of others were injured and traumatized. Anyone who visits the Kigali Genocide Memorial in the downtown area of the city feels it. The atrocities shown here are unbearable. Visitors to the memorial regularly faint. The wounds still run so deep. But the country of approximately 12 million people has worked extremely hard to put the past and poverty behind it. In the process, it has become a type of African role model in the decades since the massacre occurred.
“Kigali changes every day,” said a man who was driving the visitor through the city. Construction is going on everywhere, frequently funded by international investors. “Just look where we are today,” the young man said during the trip through the financial district with its many new skyscrapers, hotels and conference centers. The country is politically stable, has produced impressive economic growth and takes a tough stand against corruption. The political roadmap drawn up by President Kagame has defined milestones and is being systematically applied. The strict import ban on plastic bags, for instance, seems to be working. The city is very clean, unlike many other countries in southern Africa.
But not all people have gained a share of the new prosperity. In particular, young residents of the capital will meet on the rooftop bar of the Umbumwe Hotel and gaze out on the sea of light blazing in the city below. Or they will drive to the restaurant Pili Pili, where steaks weighing a kilo are served and loud music is played in a setting located between a pool and a soccer cage.
“These young people are modern and hungry for individual mobility,” said Michaella Rugwizangoga, the CEO of the new Volkswagen Mobility Solutions Rwanda. “We also have a growing number of tourists who are visiting the country. They all want to know how they can get around. The opportunities of mobility providers are unlimited. There is a huge demand for such offers.”
Women in management positions
Michaella Rugwizangoga’s job is to implement the strategy for Rwanda and to refine it in years to come. She set up the team that was trained for the start of production in Kenya. “We are really impressed by the speed that our mechanics are learning. We are right on schedule,” Michaella Rugwizangoga said after having her picture taken with her employees. She worked with a start-up in Kigali to develop the app that customers use to order the services. “We are looking for more talented people, and we have one of the world’s best universities here.”
The fact that a woman holds such a high position may be unusual in other African countries. But not in Rwanda. “The Bank of Kigali has a woman as CEO, and RwandAir also has a female CEO,” Rugwizangoga said. More than 60 percent of the members of Rwanda's Parliament are women as well – a level that Germany cannot come close to reaching. “Sharing power is part of our culture,” Rugwizangoga explained. The government is also working hard to encourage women to enter technical jobs and study technical subjects, she added. She initially studied engineering at the university in Kigali for a year. She then received a scholarship and continued her studies in Germany. She is now working to set up the automotive industry in Rwanda.
“This is something very special for the people of Rwanda,” Festus Tuyiringire said. The 42-year-old man leads the vehicle-assembly team and was standing outside of the gate of Volkswagen plant after the event. The president and the other guests had already left. “We are creating something here, for ourselves and for our future,” Tuyiringire added. And what do his friends and family have to say about his job of building German cars in Rwanda? “They are really happy to see things get started,” Tuyiringire said. His colleagues nodded in agreement. They can hardly wait to start work.