Volkswagen South Africa (VWSA) will start semi-knocked down (SKD) assembly in Ghana in November this year, giving its expansion into Africa additional momentum. Thomas Schäfer, chair and MD of VWSA, said the group has registered a company in Ghana and will finalise all the details for a joint venture with Universal Motors, its long-term partner in Accra, in the next four weeks.
This follows VWSA signing a memorandum of understanding (MoU) with the Ghanaian government in September last year to establish a vehicle assembly facility in the country and assess the feasibility of introducing a modern mobility concept. Ghana will be the fourth new assembly plant VWSA has established in Africa.
The vehicle manufacturer already has operational assembly plants in Nigeria, Rwanda and Kenya and is involved in discussions with the Ethiopian government after signing a MoU with that government earlier this year on collaborating and delivering a joint vision for the establishment of a motor industry in the country.
The establishment of these assembly plants followed Schaefer in March 2017 taking over responsibility for developing and networking 49 African states that are part of a new sub-Saharan Africa region established by the German-based original equipment manufacturer (OEM).
The establishment of the fourth region is in line with the company’s regionalisation strategy for the Volkswagen brand. Schaefer said the new facility will start with the assembly of the Tiguan, Teramont and Passat and then probably go to the assembly of Polos.
He said the group is also considering assembling some Brazilian products in Ghana, including the Saveiro half-ton bakkie. Schäfer said the current vehicle market in Ghana is not a reference for future volumes because the automotive policy the Ghanaian government had put in place will effectively rapidly phase out used car importation over the next three years.
Schäfer said the company is setting up the initial phased SKD plant with an annual capacity of 5 000 units but plans to ramp this up to an annual capacity of 20 000 to 30 000 units soon.
The signing by the Ghanaian government of an automotive industrial policy about 10 days ago was crucial in Volkswagen proceeding with its assembly operation plans in the country. Schäfer said the Ghanaian automotive industrial policy has been launched and approved by the government’s cabinet.
Schäfer, who also chairs the African Association of Automotive Manufacturers, has been a vocal critic of those who view the establishment of an automotive industry in Africa as a risk to SA’s automotive industry.
He said last year that SA could say goodbye to its motor industry in the next 10 years if it was unable to create a joint African market for the country’s automotive companies. Schäfer said Volkswagen plans to play a leading role in the development of a strong automotive industry in Africa.