Volkswagen Signs Vehicle Assembly Plant Agreement With Ethiopia

German automaker Volkswagen continues its engagement in emerging countries in Sub-Saharan Africa by signing a memorandum of understanding (MoU) with the Ethiopian government .

In the presence of Frank-Walter Steinmeier, President of the Federal Republic of Germany, a Memorandum of Understanding (MoU) was signed by Thomas Schaefer, Head of the Volkswagen Sub-Saharan Africa Region and the Commissioner of the Ethiopian Investment Commission (EIC), Abebe Abebayehu.

Volkswagen will focus on four key pillars: 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 training center. As such, Volkswagen will work closely with the Ethiopian higher education and training institutions for skills development and capacity building of local talent.

Thomas Schaefer, Head of Volkswagen Sub-Saharan Africa, commented:
“As one of the fastest growing economies and with the second highest population in the continent, Ethiopia is an ideal country to advance our Sub-Saharan Africa development strategy”

“Additionally, Volkswagen intends on tapping into existing expertise and strategic resources in Ethiopian to help to establish a thriving automotive components industry”

Ethiopia becomes the third country in Sub-Saharan Africa to sign a Memorandum of Understanding with Volkswagen in the past six months. 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. The Automotive Giant also has vehicle assembly operations in Algeria, Kenya and Rwanda.

Ethiopia currently has the world’s lowest rate of car ownership, with only two cars per 1,000 inhabitants.